EuroFM Research Monograph

FACILITIES MANAGEMENT PROCESSES

June 2008 www.eurofm.org ISBN 978-1-905732-43-2 1

A EuroFM

Publication

Publication edited by EuroFM With the collaboration of the Centre for Facilities Management, Manchester, UK Facilities Management Processes First Edition June 2008 ISBN 978-1-905732-43-2 Editor Professor Keith Alexander, Director, Centre for Facilities Management Centre for Facilities Management One Central Park Northampton Road Manchester, M40 5WW

EuroFM Research Network Group Scientific Committee Prof Keith Alexander, University of Salford, UK Prof Jan Brochner, Chalmers University of Technology, Sweden Prof Tore Haugen, NTNU, Trondheim, Norway Prof Kunibert Lennerts, University of Karlsruhe, Germany Prof Kari I. Levainen, Helsinki University of Technology, Finland Assoc Prof Alex Redlein, TU Vienna, Austria Prof Andreas van Wagenberg, University of Wageningen, The Netherlands EuroFM contact information Euro FM Network P.O. Box 5135 NL-1410 AC Naarden The Netherlands Tel.: +31 35 694 27 85 [email protected] www.eurofm.org

EuroFM

EuroFM’s Mission is the advancement of knowledge in Facility Management in Europe and its application in Practice, Education and Research. EuroFm is a Network of more than 78 organisations, all focussed on Facility Management. They are based in more than 20 European countries and represent professional (national) associations, education and research institutes and corporate organisations. The open Network of professionals, academics and researchers generates a rich mix of activity, initiated by three network groups: the Practice Network Group, the Education Network Group and the Research Network Group. These Network groups form the core of EuroFM. The EuroFM members are involved in an open exchange of information and experience through meetings, seminars and workshops, through collaboration in research projects, sometimes funded by EC, and through the development of joint educational programmes. Proceedings of these activities are disseminated through the Network via the EuroFM Website, an annual conference and through newsletters, research papers and publications in Facilities.

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EuroFM Research Network Group

Research Report

EuroFM Monograph

FACILITIES MANAGEMENT PROCESSES Editor: Professor Keith Alexander University of Salford

Published by: European Facility Management Network Postbus 5135 1410 AC Naarden The Netherlands E-mail: [email protected] http://www.eurofm.org June 2008 3

EuroFM Monograph

Facilities Management Processes CONTENTS 5 6 7

Preface Foreword Introduction Section One

FM processes: modelling

13 14

Business process modelling for FM Brian Atkin and Bo-Christer Bjork

Process oriented development of an integrated FM system

27

Georg F Wiesinger

35

Process performance model in FM René Sigg

Section Two

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FM processes: mapping

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Towards a process protocol for FM Andrew Fleming, Angela Lee and Keith Alexander

FM implementation processes supported by IT

56

Bernd Buettner, Torbe Bernhold, Michael May and Frank Riemenschneider

Reference Processes and Internal Control Systems within Facility Management

67

Alexander Redlein and Barbara Giller

Section Three

FM Processes: applications

77 78

Process analysis for hospital FM Kunibert Lennerts, Jochen Abel, Uwe Pfrunder and Vishal Sharma

Process improvement in FM: the SPICE approach

90

Dilanthi Amaratunga, Richard Haigh, David Baldry and Marjan Sarshar

Facilities Management Processes In Higher Education Institution Md Yusof Hamid, David Baldry and Keith Alexander

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EuroFM Monograph

Facilities Management Processes PREFACE EuroFM’s mission is the advancement of knowledge in Facility Management (FM) in Europe and its application in Practice, Education and Research. An understanding of the processes behind the activities of FM is crucial to develop the profession. With this publication EuroFM provides a basis for such an understanding EuroFM strongly supports the ongoing work on standardization of FM in the European organisation CEN and the Technical Committee CEN/TC348. An agreement of collaboration has been made between EuroFM and the secretariat of CEN/TC348. One of the four current work groups are dealing specifically with FM processes and the convenor of the group, Professor Keith Alexander, Center for Facilities Management, Salford University is a former chairman of EuroFM and EuroFM’s Research Network Group (RNG). In 2007 the board of EuroFM adopted a proposal from RNG to financially support a research project on FM Processes. The project aimed to identify and review existing research being carried out in EuroFM member organisations and other related research institutions in Europe. The objectives were to identify opportunities for research collaboration and to inform the development of the European standard for FM processes. The project was managed by Keith Alexander and carried out by Andrew Fleming, Salford University. The review identified work in seven centres, with complimentary research in three main categories – modelling and mapping, optimisation and improvement and (healthcare) applications. This monograph includes an overview of the work and the results together with a number of papers written by researchers from EuroFM member institutions about their research on FM processes. EuroFM is pleased to publish the monograph and hopes that it will be an important element in the advancement of knowledge in FM and be of inspiration for practitioners, students and other researchers for the activities in their organizations and a basis for further collaborative work in EuroFM. We would like to thank Keith Alexander for his contribution as editor of the monograph and all the authors for their contributions. Albert Pilger Chairman, EuroFM

Per Anker Jensen Chairman, EuroFM, Research Network Group

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EuroFM Monograph

Facilities Management Processes FOREWORD This monograph brings together a combination of original and papers previously published under the auspices of EuroFM, to provide an overview of research work about facilities management processes being undertaken in member organisations. Original papers have been refereed by the Scientific Committee for the EuroFM Research Symposium. Identification and collation of existing research makes a contribution to the development of a new European standard in Facilities Management Processes, scheduled for publication by CEN, the European Standards Organisation, by the end of this year. It is also hoped that its publication will promote interest in a process-based approach to facilities management and will stimulate further, collaborative research work to address the need to understand and improve the contribution that strategic facilities management processes make to organisational effectiveness. EuroFM promotes collaboration across Europe and amongst practice, research and education. It is intended to develop the research project on FM processes to identify and address research needs arising from application of process concepts, systems and methods and implementation of the new standard, in all countries, across sectors and in all types of organisations. The papers raise a mix of theoretical, methodological and practical issues and represent a diversity of approach to modelling, mapping, assessing and continually improving processes. The papers provide background input to the EuroFM Research Symposium, to raise debate and discussion of appropriate ways of developing processes to support achievement of an organisation’s strategic objectives. Professor Keith Alexander Leader, EuroFM Facilities Management Processes Research Project June 2008

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Introduction Keith Alexander University of Salford, UK EuroFM Collaborative Research Project In 2006, EuroFM invited members to contribute to the next stage of the European FM standardisation process, by identifying and providing relevant research and documents. It was intended that members will make the outputs of this research available to Working Groups. In response, the FM processes working group made proposals for a EuroFM co-ordinated research project, as a contribution to CEN work, to provide research support for the exploratory phase of the development of the standard for FM processes. The aims of the project were to collate, analyse and present output from EuroFM members and produce a state-of-the art report on research on Facilities Management processes. The overall objectives of the project were: To collate and analyse existing research on FM processes; To produce and inventory of relevant documents; To identify and select process mapping approach and tools; To identify key examples and select cases; To prepare case studies at a strategic, tactical and operational level; To prepare and report on workshops. An agreed output from the project is a state-of-the-art report including: Literature review Inventory of existing research; Case studies of FM process mapping; Workshop reports; The paper summarises the work, reviews its importance to FM research, practice and education and concludes with suggestions for further collaborative work in EuroFM. Background A new European standard on FM processes part of the drive to standardise Facility Management. The aim of the standard is to provide guidance to facilities management organisations on the development and improvement of their processes to support the primary activities. This will support organisational development, innovation and improvement that will form a foundation for the further professionalisation of facilities Management and its advancement in Europe.

Facility Management is defined in EN15221: Part 1, 2006, ‘Facility Management: terms and definitions’ as the ‘integration of processes within an organisation to 7

maintain and develop the agreed services which support and improve the effectiveness of primary activities’. Underlying this definition is a process-based, management systems approach, as defined in the ISO 9000 series. Further development of European standards in Facility Management, based on EN 15221: Part 1 will, therefore, rely on a better understanding of the processes involved and the mechanisms for their integration. These processes need to be identified and described, mapped and modelled to produce a generic protocol for Facility Management. It is intended that the standard lays the foundations of further work in developing other Facility Management standards and further develops the processes involved in creating FM agreements in EN 15221: Part 2. The standard has been developed as one of four new standards and adopted an agreed set of principles, underlying the Facility Management approach, to ensure consistency. These are incorporated in the basic principles of a process-based management system upon which this standard is founded. The standard aligns to ISO 9000: 2000 Quality Management Systems and applies guidance on the concepts and use of a process-based approach to management systems to the field of Facility Management. The standard also builds on widely accepted management principles, in particular value chain (Porter, 1985) and quality control (Deming, 1986) which underlie process-based management systems. The process approach, described in this standard, should be widely applicable across the European member countries. In order to do this they must build from the existing model in the previous standard (EN 15221-1:2006), be generic, and not to prescriptive and enable companies and organisations to not be too prescriptive. Through applying the standard, organisations should be able to understand the importance of facility management processes to their effectiveness and understand the need to assess the maturity of their existing processes. This will provide a basis for developing and improving the facilities management processes through a consistent, process-based management approach. Generic and examples are provided in the standard to assist organisations The guidance will enable organisational development, innovation and improvement that will form a foundation for further professional development of FM and its advancement in Europe. Existing Research The first phase of the FM Processes project has sought to identify and review existing research being carried out in EuroFM member organisations and other related research institutions in Europe. This phase had two objectives – to identify opportunities for research collaboration and to inform the development of a European standard for FM processes. The review identified work in seven centres, with complimentary research in three main categories – modelling and mapping, optimisation and improvement and (healthcare) applications. 8

IFMA Switzerland worked with 30 project partners to create a process-based model (Pro-LeMo) as a basis for the commissioning of FM services. Work in Austria and Germany focuses on optimisation through the development of reference processes for Facility Management. A more strategic approach is taken in the United Kingdom to provide high-level methods and tools including a generic protocol and a methodology for assessing the maturity of an organisation’s FM processes. Examples of applications in the UK and Germany are mainly drawn from the healthcare sector. Facilities management process models For the purposes of the monograph, business process modeling is the activity of representing both the current (‘as is’) and future (‘to be’) processes of an enterprise, so that the current process may be analysed and improved. Process models are processes of the same nature that are classified together into a model. Thus, a process model is a description of a process at the type level. The three papers in the introductory section of the monograph introduce the strategic importance of facilities management, the need for increased awareness of the need to improve processes and for a framework for organisation and decision making. Atkin and Bjork (2008) show how process models can provide owners and managers of facilities with a means by which they can define decision-making and determine improvements to their current procedures and practices. Wiesinger (2006) introduces a process chain paradigm that has been successfully applied in process modelling in many practical projects in Germany. He suggests that this method might serve as a basis for facilities management agreements and control of performance. Sigg (2007) describes Swiss work to create an overall process-based model for commissioning facilities services. Facilities management process mapping Business process mapping refers to activities involved in defining exactly what a business entity does, who is responsible, to what standard a process should be completed and how the success of a business process can be determined. The three papers in this section of the monograph describe research work, primarily in Germany, Austria and the UK. Fleming et al (2008) describe developmental work to create a high-level protocol for generic facilities management processes to enable organisations to manage activities and the phases of the ongoing programme to achieve business and strategic objectives. The German and Austrian work focuses on the development of reference processes for internal control and use in IT applications. Beuttner et al (2008) introduce an integrated best-practice process model, developed from case studies and containing all relevant facilities management implementation processes. The paper describes a computer-aided tool to support users and consultants in implementing best practice. 9

Redlein and Giller (2008) introduce the importance of internal control systems in organisations and show the relevance of new accounting standards to facilities management. Using previously reported work on reference processes in facilities management (Redlein and Fleischmann, 2007), existing processes are defined and enlarged to include risks and control activities in order to provide guidance for the introduction of an internal control system in facilities management. Facilities management process applications The three papers in this section of the monograph introduce applications of process thinking to facilities management in the public sector, in healthcare and higher education settings. Lennerts et al (2008) describe a step by step process for analysing facilities management processes in healthcare settings. The paper describes the OPIK research project to design standard processes for typical FM services, in order to introduce professional facilities management methods in hospitals. Processes have been field tested and evaluated in terms of interaction with the core process as well as determining cost and quality factors. Alternative versions of the OPIK research report have been published previously published in Facilities Management journals (Lennerts et al, 2003 and Lennerts et al, 2005). Amaratunga et al also address applications in the health sector and describe a process for assessing facilities management (FM) process capabilities. The SPICE FM framework is a method that FM organisations can use to continuously monitor and improve their performance. The SPICE FM framework has been tested in a series of case studies to ensure that its outputs are appropriate to the facilities management sector and of real value to organisations. The SPICE FM work has been widely published in healthcare, business process and facilities management journals (see for example, Amaratunga et al, 2002 and Amaratunga et al, 2002a) Hamid et al (2008) seek to understand the application of facilities management processes in higher education institutions in the UK focusing on maintenance and operations in supporting the overall aims and objectives of the organisation. Business Process Management The papers in the monograph represent contrasting approaches and methodologies for modeling and representing facilities management processes. Some take a more strategic view (Atkin, Fleming, Yusof), and suggest a top-down deductive process to derive facilities management processes. Others take a more detailed, technical and operational view (May, Redlein, Lennerts) and adopt a more inductive approach to delivering facilities services. This papers also reflect incremental and evolutionary approaches to improving business processes, as against comprehensive re-engineering and replacement of existing ways of working. Underlying the approaches are philosophical and cultural differences that need to be recognised and better understood. Recent literature (see Jeston and Nelis, 2008) and debate suggests business process management as an overall discipline and a critical item on the management agenda. Jeston and Nellis trace the history of the business process management movement, from its routes in TQM and business process re-engineering, to its current status (the third wave, Smith and 10

Fingar, 2002). They differentiate business process management and business process improvement. In his foreword to the book (pp xvi-xvii), Tom Davenport concludes that, despite all the methodological issues, process management all boils down to human change. People are the key to implementing all process designs. ‘If they don’t want to work in new ways, it is often difficult to force them to do so. Hence any successful process management effort requires a strong emphasis on culture, leadership and change management’. Business Process Management (BPM) is ‘a disciplined approach to identify, design, execute, document, monitor, control, and measure both automated and non-automated business processes to achieve consistent, targeted results consistent with an organisation's strategic goals’. BPM involves the deliberate, collaborative and increasingly technology-aided definition, improvement, innovation, and management of end-to-end business processes that drive business results, create value, and enable an organisation to meet its business objectives with more agility. Business Process Management (BPM) is often confused with Business Process Improvement (BPI) initiatives. BPI initiatives typically imply projects, or a set of one-time unique improvements in redesigning or otherwise fixing a process. Common BPI methodologies include six sigma, lean, total quality management (TQM) and reengineering (Hammer, 1993). BPM, on the other hand implies an ongoing organisational commitment to meeting the organisation’s performance goals by managing its processes. It involves a continuous, feedback loop to ensure the organisation’s business processes are aligned to its strategy and performing to expectations. Organisations practicing BPM may employ common BPI methodologies for a specific improvement; however the use of these BPI methodologies does not imply that the organisation is committed to the practice of BPM. Future challenges Seen in the context of an organisation’s strategic management, facilities management faces, if it is retain its relevance and gain influence and position. Key issues of governance, business continuity, responsibility and reporting, that impact on the sustainability of a business, have broad implications for how facilities management. Unless strategic facilities management processes are developed that recognise the nature of the business processes needed and contribute to meeting the challenge, the discipline will not survive. References Amaratunga, D, Sarshar, M and Baldry, D, (2002), ‘Process improvement in Facilities Management: the SPICE approach’, Business Process Management Journal, Vol 8 No 4, pp 318-337; Amaratunga, D, Haigh, R, Sarshar, M and Baldry, D, (2002a), ‘Assessing facilities management process maturity: an NHS case study’, International Journal of Healthcare Quality Assurance, Vol 15/6, pp 277-288; Atkin, B and Björk, B-C, (2007), ‘Understanding the context for best practice facilities management from the client’s perspective’, Facilities, Vol. 25 No. 13/14, pp. 479-492; 11

Atkin, B and Björk, B-C, (2008), ‘Business Process Modelling for FM: processes before procedures’, Proceedings, EuroFM Research Symposium, EFMC 2008, 10/11 June, Manchester; Buettner, B, Torben, B, May, M and Riemenschneider, F, (2008), ‘FM implementation processes supported by IT’, Proceedings, EuroFM Research Symposium, EFMC 2008, 10/11 June, Manchester; Davenport, T. H. (1993), ‘Process Innovation – reengineering work through Information Technology’, Boston, USA. Deming, W. Edwards, (1986), ‘Out of the Crisis’, MIT Center for Advanced Engineering Study; Fleming, A, Lee, A and Alexander, K, (2008), ‘Towards a Process Protocol for Facilities Management’, Proceedings, EuroFM Research Symposium, EFMC 2008, 10/11 June, Manchester; Hamid, Y, Baldry, D and Alexander, K, (2008), ‘Facilities Management Processes In Higher Education Institution: an Understanding’, Proceedings, EuroFM Research Symposium, EFMC 2008, 10/11 June, Manchester; Hammer, M. & Champy, J. (1993), ‘Reengineering the Corporation - A Manifesto for Business Revolution’, New York; Jeston, J and Nelis, J, (2008), ‘Business process management: practical guidelines to successful implementations’, Butterworth-Heinemann; Lennerts, K., Abel, J., Pfrunder, U. and Sharma, V. (2003), “Reducing health-care costs through optimised facility management-related processes”, Journal of Facilities Management, Vol. 2 No. 2, pp. 192-206. Lennerts, K, Able, J, Pfrunder, U and Sharma, V, (2005), ‘Step-by-step process analysis for hospital facility management: an insight into the OPIK research project’, Facilities, Vol. 23 No. 3/4, pp. 164-175; Porter, M, (1985), ‘Competitive advantage: creating and sustaining superior performance’, Free Press; Redlein, A and Fleischmann, G, (2006), ‘Reference process modelling within Facility Management’, Proceedings, Research Symposium, EFMC 2006, 7/9 March, Frankfurt; Redlein, A and Giller, B (2008), ‘Reference Processes and Internal Control Systems within Facility Management’, Proceedings, EuroFM Research Symposium, EFMC 2008, 10/11 June, Manchester; Smith, H and Fingar, P, (2002), Business Process Management: the third wave’, MeghanKiffer Press; Wiesinger, G F, (2006), ‘Process oriented Development of an integrated Facility Management system’, Proceedings, Research Symposium, EFMC 2006, 7/9 March, Frankfurt

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EuroFM Monograph

Facilities Management Processes

Section One FM PROCESSES: MODELLING Business process modelling for FM Brian Atkin and Bo-Christer Bjork

Process oriented development of an integrated FM system Georg F Wiesinger

Process performance model in FM René Sigg

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Business Process Modelling for FM Processes before Procedures Brian Atkin, Atkin Research and Development Bo-Christer Björk, Swedish School of Economics & Business Admin, Helsinki

Abstract Process models are a normal part of the analysis and design of many industrial methods and practices. In facilities management, the use of process modelling is relatively unknown, but is not without proponents. This paper shows how process models can provide owners and managers of facilities with a means by which they can define decision-making and determine improvements to their current procedures and practices. The implication is that the design of processes should precede the drafting of procedures. Since procedures tend to focus on specific areas, it is essential that they are contextualised and enabled by the correct information and appropriate controls. A hierarchical process model that portrays the broader context and which is explicitly top-down is more likely to be inclusive than a set of procedures that have been assembled from different sources, no matter how well-intentioned. Concentrating on devising the best procedures, without account of the underlying processes, is likely to result ultimately in the exact attainment of inferior plans. This situation typifies the paradox in current thinking about best practices, where the summation of such practices is expected to yield improved efficiency and fewer wasted resources and missed deadlines. Yet, it may obscure simpler, more effective, means for achieving the owner’s goals in service delivery. An example process model is used to show where and how decision-making can be shared and questioned in an attempt to define the basis of ‘fit for purpose’ procedures. Keywords: facilities management, process modelling, IDEF0, decision-making, context, goal-directed, procedures.

Introduction The use of process modelling by owners and managers of facilities to maintain an accurate, holistic view of the activities, people, systems and information required to support competent decision-making has been examined in previous work by Atkin and Björk (2007). That work also demonstrated the top-down nature of decision-making from strategy through policymaking and into operations and the importance of context in any examination of current best practice. A particular aim was to show how the decision regarding the outsourcing of services is embedded in a process that must be fully appreciated if decision-making is to be logical, timely and parsimonious in the use of resources. Implicitly, the argument is that top-down, contextualised processes help to position decision-making at its appropriate level and that, irrespective of the level in the hierarchy, all are linked (in turn) to the top-level business strategy of the owner organisation. There is anecdotal evidence to suggest that decisions on 14

sourcing are made on a less than rational basis, at an incorrect level or at the wrong time. One explanation is that often there is simply no explicit model or mapping of the process that an owner or manager can follow and question (Atkin and Björk, 2007). In its absence, reliance is placed upon a partial representation of the whole, with the risk that actions, their sequencing and enabling information are poorly defined, detailed and determined. The latter factors are fundamental to competent decision-making. Opposition to the call for process modelling mostly centres on the perceived enormity of the task of defining all necessary activities, inputs, outputs and controls. It is claimed that the resultant models would be so unwieldy as to be impractical for day-to-day operations. The top-down nature of the modelling approach, where decomposition occurs only when it serves a purpose, is conveniently ignored in bolstering concern over the scale of the task and its questionable value. A further challenge is to be found in the preference for procedures based on directives or other means of prescribing intentions. We would contend that, despite attention to the wording, such directives may be found to be erroneous, because they fail to take account of the totality of the FM process, and that the thinking (and hence the process itself) is not, to coin a phrase, ‘joined-up’. In persisting with a focus on procedures, there is the grave risk of reinforcing inefficiencies – since they cannot be easily detected – and denying opportunity for examining better ways of satisfying goals through an inability to question methods. That was essentially our position in Atkin and Björk (2007), which we intend to develop further here and for which our primary thesis is that process drives procedures, not the other way around. This paper will show how process modelling can assist owners and managers to map their intentions through a coordinated set of activities that is overtly goal-directed. Far from being an academic exercise, the models presented in this paper have practical relevance since they provide explicit statements that all-involved can share and question, and from which necessary and sufficient procedures can be derived. As a counter to criticism, we would enquire why procedures should ever be drafted for which their purpose in the overall scheme of things cannot be clearly demonstrated. Rationale for process modelling The adoption of process modelling is widespread, covering most industrial sectors. Yet, its visibility within facilities management to date has been little more than illustrative of the potential. There may be valid reasons for the limited acknowledgement of its value beyond mere lack of awareness. It is easy to speculate about the reasons, but more rewarding to understand why and how process modelling can assist owners and managers of facilities in their search for improvement in service delivery. In contrast to other industrial sectors, facilities management is far from complex. Unlike most industrial processes, it has few iterative components of the kind that we see, for example, in engineering design; but it does share a number of important characteristics such as quality control, performance feedback and learning. In performing a service containing many repetitive elements which, in many cases, strive to maintain the status quo, we are relatively clear of the complications that prototyping and testing can bring as a precursor to normal production. In this sense at least, we have in a process model a template for improvement that is transparent and, therefore, transferable. Indeed, the transferability of best practices becomes all the more probable when the context is understood and transparency is assured. Reproducibility – a challenge when wishing to imitate an exemplar of best practice – is more likely to be achieved. So, in contrast to the design and construction process for delivering a facility, the process of operating it can be more readily defined, detailed and determined (Atkin & Björk, 2007). An express purpose 15

of process modelling is to make relationships and flows of information explicit. In doing so, the actors in the process can reach a shared understanding of what has to be done, by whom, in what sequence and with which resources. This shared understanding is essential to achieving an accurate view of the process so that individual actors can appreciate their role, obligations and limitations. Yet, it is essential that the view is holistic, by encompassing the process in its entirety and not merely a fragment of concern to a single interest or group. A shared model portraying the (facilities management) process as-is provides the starting point for questions to initiate discussion and study that can form the basis of a process of continual improvement; in fact, the goal is a model for improvement. Without shared understanding, the basis for improvement is weakened and the likelihood of determining the process as it is really meant to-be is lost. The means for moving from where the owner organisation is today to where it wants to be tomorrow can be greatly assisted by some kind of plan or map. A process model is that map and a reference point (or benchmark) against which to measure performance and changes in it. Change management is about a making the transition from the present to the future. A process model can be a blueprint for change. Progress in process modelling ICT has become all-pervasive; even so, tools that could be used to shape an improved understanding of work and the workplace are sadly lacking. The proliferation of CAD, document management and project management systems and the internet makes it difficult for the different actors in building and facility-related projects to cooperate efficiently unless the data creation and exchange process is well known and agreed. At the same time, there is increasing pressure on organisations to define and redefine their processes as an integral part of their quality management systems. Organisations striving for a competitive edge recognise the opportunities offered by ICT and have undertaken business process reengineering (BPR) efforts where process modelling has naturally taken a prominent role. Although process modelling using ICT-supported tools is a relative newcomer to the facilities management sector, companies and trade associations have, over the years, produced definitions of the processes with which they are associated through less formalised methods. These definitions have, for instance, served the internal needs of organisations in rationalising their working methods, the needs of the sector for standardised principles for setting fees as well as the needs of society or owners in quality control. Often, such models have taken the form of checklists of activities published by trade associations or other representative bodies. Process modelling can be undertaken on many levels, ranging from the lifecycle of a building that spans decades down to the technical details of how to install different types of components (Katranuschkov, 2006). The motives and views of the models differ considerably from one level to the other. On certain levels, the central motive for modelling may be to establish the borders between the activities of the different actors that participate in the process, as well as defining the flows of products, materials, information and money that occur at the interfaces. On other, more detailed levels, the exact sequence of activities needed for a particular technical task may be modelled, in order to increase job safety, minimise the risk of defects or even to provide information support for the development of automated responses. Important, earlier attempts to define formalised construction process models include the IBPM (Sanvido et al., 1990), VTT’s model of the Finnish construction process (Karhu & Lalhdenperä 1999) and the UK Generic Process Protocol (Kagioglou et al., 2000, Process protocol, 2001). Each of these efforts has had a different focus. The IBPM and the Generic Process Protocol work have tried to define normative models that attempt to inform the sector 16

about how it should work in order to become more efficient. VTT’s model is closer to current practice and tries to define it more precisely using formal modelling tools in order to facilitate communication about the process. Work by Katranuschkov et al. (2004) on the process matrix has taken these ideas further by proposing a basis for project team collaboration. The matrix was designed with two primary objectives in mind: (1) to improve the capability of information capture so that various analyses can be easily performed and reported, as and whenever needed; and (2) to provide a suitable format for database management as well as web-based presentation and processing in support of collaboration. Earlier research on process modelling of the facilities management process should also be recognised, notably that of Svensson (1998) and Lundgren (2002). Their work has provided some useful working examples. Concept and protocols Our approach to process modelling has its origins in the work of NIST (1993) and De Marca (1988) and is embodied in the IDEF0 business process modelling method, also known as the structured analysis and design technique (SADT). IDEF0 (taken from Integrated Definition) is one of a number of modelling methods or protocols for which efficient software, incorporating data exportation, is available for use in defining databases and systems. Another is IDEF3, which models work flows. The relationship between them is straightforward: a process can be defined in broad terms at the higher levels and its decomposition into lower levels can be used to show the flow of work in specific areas without losing the integrity of the total model. This retention of model integrity occurs because lower level models or maps inherent the properties (inputs, controls, outputs and mechanisms (ICOMS)) from the higher levels. In practice, it is just the activities that are decomposed into more discrete steps. IDEF0 has proven to be popular in building and facility-related process modelling efforts and is regularly used in product modelling for describing the processes in which product data are defined and exchanged. An IDEF0 model consists of a set of activities, depicted by rectangles, which are connected and arranged in a hierarchical decomposition. An activity needs some inputs and transforms them into outputs by use of machines and/or people (i.e. actors): these are collectively referred to as mechanisms. Controls constrain these activities by specifying the conditions that regulate the performance of an activity. The purpose of using IDEF0 is to reveal the meaning of a particular activity and to show the kind of information, material or energy that is conveyed through the interfaces (i.e. arrows) of activities in the process – see figure 1. From this simple description it should be easy to see how such modelling can fit the facilities management process, for indeed it is just that – a process. The basic constructs of the IDEF0 method set against the broad context of the construction process (taken to include the facilities management phase) as shown in figure 1. Note that the figure and those below are presented without the full IDEF0 ‘kit’, that is, the legend and other referencing aids in the header.

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Figure 1: Basic constructs of the IDEF0 method IDEF0 uses a top-down approach that encourages a holistic thinking and levelled views. By using IDEF0, a process can be analysed as a hierarchical set of interrelated activities, where the diagrams at the top of the model are more strategic in intent than those at the bottom which are more operationally-orientated. In creating the model, the analyst or manager needs to decompose the model only to a level or levels that are consistent with the requirements of the job-in-hand. The contrasting bottom-up approach can force the analyst or manager to model details that may serve little use later, thus wasting valuable resource and distracting from the purpose of the exercise. The use and communication power of process models is an interesting matter and one that has led to important observations through their use in practice: 1. Involving stakeholders in the mapping of processes that affect them is an obvious way of ensuring commitment and results that are both reliable and acceptable. The IDEF0 notations are not difficult to follow so that practitioners can be easily walked-through the models to obtain their comments. The approach is also likely to enhance their understanding of the process and lead to suggestions of how to improve it. 2. No matter how much detail is captured in a process model it remains, by definition, an abstraction of reality. Although complex, reality can be presented in terms of its essential elements to the extent that attention can focus on where it is needed most without the distraction from superfluous information and detail. Concerns over the amount of detail needing to be captured are often easily allayed by the top-down approach.

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The model explained In any logical examination of facilities management as a process, it would be reasonable to adopt the perspective of the owner of the facility (Atkin & Brooks 2005). Although there is nothing to prevent other perspectives being taken, our rationale is that owners drive the process and are in the best position to see the broader process – important where facilities management is a phase within a total construction process. Other stakeholder perspectives could be adopted, each differing according to the business objectives of the analyst or manager. None would, in theory, match the completeness or purpose as understood by the owner. At the highest level in our model, we can observe the primary inputs of Business needs and Schedule of facilities, which enable the facilities management function – see figure 2. Primary outputs are delivering Best value and satisfaction for the owner and end-users of the facility. The primary controls (or constraints) are related to quality (i.e. performance), productivity and financial limits.

Figure 2: Top level view of FM process (FM-01) Initial decomposition of the model reveals five key stages, or high-level functions: formulating the FM strategy, analysing requirements, developing solutions, implementing solutions and monitoring service provision – see figure 3. The guidelines for this approach are discussed in detail by Atkin & Brooks (2005). The justification for this reliance is that the work in question defines much of the current facilities management process, something the authors have been developing since the precursor to that work in the late 1990s.

1

The nomenclature in parenthesis follows the hierarchy of the model top-down

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Figure 3: Perform Facilities Management (FM0) The underlying logic is that a strategy must precede decisions on procurement, not least the decision of whether or not to outsource services. An objective analysis of requirements matched to possible solutions leads directly to implementation. In lower levels, the rationale of this approach becomes evident in the automatic definition of inputs, controls and outputs. Less attention is deserving of mechanisms, i.e. senior management, facility manager and service providers, for the purpose of this exercise, since it will always be the case that owner interests will be represented by senior management and the facility manager, whereas the supply of services will be in the hands of one or more – sometimes several – service providers. Repetition of these elements can be seen throughout the model.

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Figure 4a:. Formulate FM strategy (FM1) Within figure 4a we see how the initial task is to differentiate between core and non-core services. The basis of the assumption is that the owner must identify functions and services that can be potentially outsourced and those that cannot. Decomposition of this task reveals, amongst other things, the need for market testing – see figure 4b.

Figure 4b: Differentiate services (FM11)

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The owner must be aware of what the market can offer in terms of support (i.e. non-core) services and the price of those services. The strategy is a prime example of pre-planning and the alignment of needs with opportunities.

Figure 5: Analyse requirements (FM2) Figure 5 portrays the stepwise analysis of the owner organisation’s requirements and moves logically through a process that identifies the current position and how that is being satisfied, or not. Solutions may be many and for this reason over others, there has to be close scrutiny of the options available and their ‘fit’ with the organisation’s requirements. Objective analysis underscores this aspect of the process as shown in figure 6. Here, evidence to support the case for outsourcing, retention in-house or mixed provision of services is factored-in, enabling a robust decision to be taken (Atkin & Brooks, 2005).

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Figure 6: Develop solutions (FM3) Implementation of solutions, where this is based on outsourcing, is likely to involve some form of tender competition for the supply of services and will always involve the preparation of documentation – see figure 7a.

Figure 7a: Implement solutions (FM4) In-house (retained) service provision needs specifications and service level agreements just as these are required outsourced services. The performance of services is decomposed into a 23

sequence of tasks that commences with mobilisation of the workforce and progresses through due performance, checking, reporting and re-work (as appropriate) – see figure 7b.

Figure 7b: Perform services (FM41) For obvious reason, the performance of services may be seen as the most visible aspect of facilities management. However, the context within which it appears is more important from a business process modelling perspective. If the process were to be driven by the performance of services (i.e. specified tasks and procedures), there could be doubt as to the efficacy of provision. Close analysis of needs, followed by the careful evaluation of options, leads to an informed decision to procure services and, hence, their eventual performance is likely to be influenced by how well (or badly) the preceding steps have been. Put another way, the context within which individual services are (to be) performed is made explicit by the model, providing the essential framework for specifying services and SLAs.Monitoring service provision closes the process by ensuring that performance matches requirements and that remuneration is adjusted accordingly – see figure 8. An important feature of providing services is linking remuneration (and reward) to performance (Atkin & Brooks, 2005). The final outputs match the top-level drivers of Best value and Customer satisfaction.

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Figure 8: Monitor service provision (FM5)

Conclusions A hierarchical model of the facilities management process has been presented. The model is established from one perspective – that of the owner of the facility – and, thus, reflects the owner’s needs in regard to facilities management services. The paper has portrayed this process as a hierarchical set of activities that combine to satisfy those needs. The paper has also shown, through a top-down approach, how service provision must be set in a broad context if decisions and their outcomes are to be consistent with the achievement of the owner’s goals high-level goals. As a template of current best practice, the model is the context for evaluating the worth of new insights and novel practices as part of the continual search for improvement. By adopting a goal-directed process, the owner is able to incorporate practices and procedures that are fit for purpose. Without an appreciation of the broader context, the owner risks being misled by procedures that are only superficially compelling.

References Atkin, B.L. & Björk, Bo-Christer (2007). Understanding the context for best practice facilities management from the client's perspective, Facilities, 25(13/14), 479-492. Atkin, B.L. & Brooks, A. (2005). Total Facilities Management, 2nd edition. Oxford: Blackwell Publishing. Kagioglou, M., Cooper, R., Aouad, G. & Sexton, M. (2000). Rethinking Construction: The Generic Design and Construction Process Protocol. Journal of Engineering Construction and Architectural Management, 7(2), 141-154. 25

Karhu, V. & Lahdenperä, P. (1999). A formalised process model of current Finnish design and construction practice, International Journal of Construction Information Technology, 7(1), 51-71. Katranuschkov, P. (2006). Process modelling, process management and collaboration – editorial, J. Information Technology in Construction, 11, Special Issue on Process Modelling, Process Management and Collaboration, 447-448. (http://www.itcon.org/2006/33) Katranuschkov, P., Gehre, A., Scherer, R.J., Wix, J. & Liebich, T. (2004). User requirements capture in distributed project environments: a process-centred approach. In: Beucke, K. et al. (eds.) Proc. XthInt.Conf. on Computing in Civil and Building Engineering (ICCCBE-X), Weimar, Germany, 2-4 June, 12pp. Lundgren, B. (2002). Model Based Business Development – a case study of the communication of generic process models, Licentiate Thesis. Stockholm: Royal Institute of Technology, Department of Infrastructure, Division of System Analysis. Marca, D.A. & McGowan, C.L. (1998). SADT: Structural analysis and design technique. New York: McGraw-Hill. NIST (1993). Integration definition for function modelling. FIPS PUBS, Federal Information Processing Standards Publications, National Institute of Standards and Technology. Process protocol (2001) Website of the Process Protocol Project, University of Salford, http://www.processprotocol.com/ Sanvido, V., Khayyal, S., Guvenis, M., Norton, K., Hetrick, M., Al Muallem, M., Chung, E., Medeiros, D., Kumara, S. & Ham, I. (1990). An Integrated Building Process Model. Technical Report No. 1, Computer Integrated Construction Research Program, Pittsburgh: Pennsylvania State University. Svensson, K. (1998). Integrating Facilities Management Information – A process and Product Model Approach. Doctoral thesis. Stockholm: Royal Institute of Technology, Department of Construction Management and Economics.

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Process oriented development of an integrated FM system Georg F Wiesinger University of Dortmund, Germany Abstract Ignoring process cycles can inhibit the use potential of buildings and restrict their value as structures. Before beginning with planning, an integrated process analysis should be conducted with all stakeholders. Visualization and identification of discrete event types promotes a common understanding of the processes at all interfaces and makes meaningful agreement and co-operation of all services possible. The Dortmund process chain paradigm has been applied in process modelling in many practical projects and the analysis has been proven to work satisfactorily. This method can serve as a basis for those the achievement of agreements and control according to the Facility Management standard DIN15221. Service level agreements and key performance indicators can be seen in the general context of the process cycle thus responsibility for the processes assigned. Keywords: Process analysis, process modelling, management system

Introduction Buildings are often looked upon and valued only by its superficial surface, the design and architecture; however, this is not their decisive component. The most important feature of a building is what happens on its inside, the performance of the core processes, which determine the success of a company. Often structures are built first and then the processes are planned according to the specification of the structure, although it needs to be the other way around. This process oriented thinking is a substantial factor in order to survive in the fast changes of competitive markets. Furthermore, this planning is no longer a unique process that simply ends with the realization of a building. Rather, it is changing to a permanent planning task in order to meet the long term strategies and objectives of a company. Due to continuously growing competition in the market, companies are forced to concentrate more and more on their core processes and therefore have to adopt new tools and methods of integrated management systems to remain competitive. Part of this management system is a thorough process analysis, which distinguishes the primary (or core) from the secondary processes. All of the secondary processes need to be professionally administered in a management system, the Facility Management, as it is defined by the current concept of DIN EN 15221 (DIN EN 15221:2005-06). The aim of this paper is to introduce a process oriented method for facility management, which the author has designed (TÜV Instandhaltungsberater Lose Blattsammlung, Industrial Facility Management ein ganzheitlicher Managementansatz, 2005 & Entwicklung prozessorientierter Instandhaltungsstrategien im FM, 2005) fitting to business objectives and restrictions of a company (e.g. environment, taxes, tolls, laws, etc.).

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Process Orientation Already in the 1950s, the industry came to the belief that a synthetic subdivision of work into small work elements and their allocation to the executing sites (according to Taylor) does not leave enough room for designing continues process chains and efficient process organizations. Today, modern management approaches such as Lean Management, Total Quality Management, or Six Sigma (ISO 9000 ff) are based on a detailed process description and analysis and require a continuous improvement of the process flows through internal analysis or external audits; however, this approach has not been extended to the field of facility management yet. Like the core processes, the company needs to manage its secondary processes such as the facilities (assets, machines, buildings, infrastructure, etc.) in such an integrated and life-cycle oriented way that the core processes are supported in the best way possible. Cleaning services for example are often not looked upon as processes and are hence not treated as such. Instead of specifying how the job needs to be done, only the demands on the final outcome of this process (e.g. area and degree of cleaning) is to be stated because the cleaning service provider has more experience in the subject (see SLAs, Chapter 6). This leads to a better concentration on the company’s core processes. Companies not only have to concentrate on their core processes, but also need to make sure to satisfy the customer’s demands, which are increasingly becoming more specific. In line with the product liability, operating responsibility, and quality management (DIN EN ISO 9001 ff, 2004) companies are forced to clearly describe and appoint the operational and organizational structure as well as the process organization. This means that the ones responsible for the processes and their competences are defined in accordance to the processes in the company. DIN EN ISO 9001 ff further defines precisely, for which processes which actions are necessary to be executed in order to meet predefined quality standards (Figure 1). This requires a detailed process analysis, which describes the interaction of the processes. For example, processes can influence other processes or a process can initiate a following process or a following process can only start once a preceding process has been completed. Through this process orientation, which serves the focusing on core processes and the satisfaction of a customer’s demands, yet uncovered utility potential is made accessible.

Figure 1: Customer oriented process model for a continuous improvement (according to DIN 9000) 28

The Process Chain Paradigm of Dortmund In order to plan on a process oriented basis, tools for modeling and analyzing the individual processes, which are supplied by the Process Chain Paradigm of Dortmund (Kuhn, A. and Pielok, T. 1994), a semi-formal model, are needed. The elementary model of process systems is the Process Chain Model (compare Figure 2) developed by Prof. Kuhn (Kuhn, A. and Pielok, T. 1994). Analyzing processes require both, the modelling of static and dynamic aspects. Therefore, the concept of the »Process Chain Model« is based on system theory and basic principles of cyberne tics. Besides other modeling concepts the main goal of the Process Chain Model is to integrate both, technical as well as organizational aspects. The core object of the Process Chain Model is the »Process Chain Element« and its four different parameters »Levels of Control«, »Processes«, »Structures« and »Resources«. Each parameter of a Process Chain Element can be visualized and documented by a number of methods. The Process Chain Elements are interconnected along the timeline and understood as an ordered sequence of actions, which transforms a defined input (objects or services from the suppliers and service companies) to a defined output (transformed capacity objects to the customer), from source to sink. During the complementation of the workflow through the process chain paradigm, the beholder, figuratively speaking, rides on the work order along the value chain through the entire company. The goal is to identify all operations (processes) to be executed, and to map them with their corresponding dependencies. Through its time directed linear description of processes and linkage through connectors a concentration on the process flows and organizational units is the consequence. The complex process interrelations are clearly portrayed by precise and concise modeling language. Hence, with its graphical lucidity of the process plans and the time-oriented flow, the Process Chain Paradigm supplies an appropriate tool for planning and analyzing processes. Especially, a management for a successful cooperation with external service providers is guaranteed through this organization of processes. As a result, Process Chain Model has been proven to be successful in more than 50 business-reengineering projects in the automotive, manufacturing, process, and food industry in recent years (VDI 3600, 2001).

Figure 2: Process Chain Model of Dortmund University (VDI 3600) 29

Process Analysis The foundation of the process analysis is the as-is state. In the as-is state, the present processes with their necessary resources and structures are gathered and analyzed with the help of the process chain paradigm. The basis for this purpose is the data analysis of the data, which is relevant to the processes. Therefore, one is able to access existing data from the data processing as well as the ERP-System or to interview the responsible employees. From this data, the process chain plans with all of their interfaces and operations are created. The processes are differentiated into the primary and the secondary process and are further cut according to their contribution to their added value to the company into useful, supporting, blind and error processes (see Figure 3), as they are defined by the Verein Deutscher Ingenieure (VDI). • • •

•

useful processes - planned processes directly participating in the creation of value for the customer supporting processes - planned processes required to allow execution of the useful processes blind processes - unplanned processes as a result of poor organization; such processes consume resources and involve costs (e.g. personnel, storage costs) without adding to the value; the benefit to the cus tomer remains constant error processes - processes as a result of errors made; such processes reduce the customer’s benefit although consuming resources

Figure 3: Useful, Supporting, Blind and Error Process (VDI 3600, 2001) In the example of a moving act, a detailed process analysis is absolutely necessary. It has to be made clear that the benefits of processes executed after the move will surpass the cost and effort of the move. An awareness of the contribution to the value of the processes, save before an automation of error and blind processes by a CAFM system, which will only 30

destroy value. The Elimination of such blind and failure processes can increase a company’s efficiency at a constant quality. Through the use of the Process Chain Paradigm, divisions of the order flow, in which problems are identified or assumed, can be particularized across many hierarchy levels. In this manner, the reference of detailed analyses to the whole remains. The process chain shows where the order has to change departments, divisions or functions. These changes represent distinctive interfaces in the process chain. Usually, they are affiliated with a higher process cycle time and increased costs and should therefore be especially accounted for. Such interfaces are to be configured and adjusted according to the order flow. This process analysis, executed as described, should be exercised on a continuous basis and be permanently fostered. The application of the process chain paradigm leads to an integrated visualization and analysis of workflows and creates the necessary transparency in the company’s goals, process flows, the internal and external customer-supplier relationships, as well as the allocation of resources. Existing Models Over the past 30 years, a wide range of Enterprise Modeling Languages (EMLs) have been developed, seeking to describe processes and other enterprise aspects. These models can be categorized into non-formal, semi formal and formal models. Non-formal models, for example, are diagrams with clear symbols and corresponding explanations, showing information processing in an industrial company. In such a diagram information exchanging relations between the single business functions such as production, procurement, distribution, quality assurance and management are portrayed. For a non-formal model unified modeling rules and graphical constructs do not exist. They have the disadvantage that their creator can easily understand its functions; however, others often cannot interpret its relations. Formal models for example are required for images of processes of goods and services in Product Data Management- (PDM) or Workflow Management Systems (WFM). These models have to be so precise and leave no room for interpretation, that they can directly be used for controlling PDM or WFM-Systems. For formal models, such as UML, require a profound knowledge of a specification language, which resembles a programming language. Moreover, the complexity of creating formal models is extremely high, compared to semi- or non-formal models. Semi-formal models are based on a defined set of graphical constructs which are used according to modeling rules. For the creation of semi-formal business process models, a variety of specification methods exist. Many of these methods derive from the field of software engineering. Typical representatives of such methods are Program Sequences, Structured Analysis (SA) according to De Marco (DeMarco, T. 1979), Structured Analysis and Design Technique (SADT) (Aktas, A. Z. 1979; Ross, D. T. 1985) Petri Networks (Lorenz, M. 1992; Reisig, W. 1985), Architecture of Integrated Information Systems (ARIS) (IDS Scheer AG, 2001; Scheer, A.W. 1996) and Integrated Business Modeling (IUM). For almost all of these methods, software tools, which support the creation of models, were developed. Since formal models are often too precise and non-formal models leave to much room for interpretation, both type of models are not adequate for planning and analyzing processes. The Process Chain Paradigm of Dortmund, as a semi-formal, represents the happy medium. It leaves the planner more flexibility, being not restricted by its preciseness and at the same time not giving to much leeway. Moreover, this model with its time directed linear description of processes and linkage through connectors focuses on the process flows and organizational units. 31

Last, but not least, the complex process interrelations are clearly portrayed and its modelling language is easily understandable. Consequently, it is a suitable tool for process planning and analysis. Outsourcing Secondary processes (e.g. maintenance, service, production planning and control, cleaning, spare part management) orientate on the core processes and are controlled by the professional facility management. These processes can either be executed internally or by an external service provider. Due to the permanently growing complexity of these demands in the core business processes, it becomes more and more important to be able to acquit oneself of the management tasks of the secondary processes as far as possible and outsource these processes. General outsourcing strategies that miss an integrated understanding of the business processes are not sufficient enough and are doomed to failure. Without this integrated understanding and a facility management approach on this basis, valuable synergetic effects and competences are lost. Service Level Agreements

Figure 4: Planning the Processes to define Facility Management Agreements (DIN EN 15221:2005-06) When a company decides to outsource a secondary process, a so called Service Level Agreement (SLA), as defined by DIN EN 15222, is set up with the service provider. In a Service Level Agreement (SLA) the company and the external service provider agree on the specific service that the latter needs to perform. The developed agreement already contains possible solutions and accords of what goals need to be attained including terms of value, reliability, quality and functions; however, the SLA does not describe specific procedures, which is entirely left up to the service provider.

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In order to be able to determine whether the service performed according to the SLA is sufficient, the company can set up operating figures, so called Key Performance.

Figure 5: Example for the process planning in a company Figure 5 shows an example for the modeling of processes in the defined borders of a subsystem in a company. The objects for performance are coming out of the sources (suppliers) and have to be delivered to the sink (costumer) in the company. The processes, which determinate and create the values of the company are the core processes. Secondary processes (e.g. maintenance, cleaning services, security services) are all the necessary processes in order to support the core processes, which can be outsourced. Before outsourcing, the process chains are to be checked for risks and disturbance possibilities and evaluated according to them. In order to be able to identify the risk carrying process domains, an event- as well as a disruption management is to be established. This applies for internal process cycles as well as the ones that have been outsourced. For each risk carrying process, an alternative process cycle, which has been customized according to other scenarios, can be planned and stipulated into the SLA. As a result, DIN 15221 requires a process oriented approach and hence a modeling and analysis of processes. In order to identify the risk carrying processes and plan alternative ones, the Process Chain Paradigm delivers the necessary planning and analysis tools, with which all the scenarios can be planned in an organized and concise way. With this management strategy, a new agreement, which adjusts to the present dynamics of the processes (new products, variations, technologies, changing markets), is defined. Such a dynamic agreement is especially essential for maintenance, in which next to the cyclic maintenance of constructional and technical facilities, also status oriented maintenance has to be induced. Depending on the specific facility (technical and automation intense or non-automation intense) and the found damage, errors or disruptions, different measures have to be taken. The application of the Process Chain Paradigm leads to an integrated visualization and analysis of workflows and creates the necessary transparency in the process flows, the 33

internal and external customer-supplier relationships, as well as the allocation of resources and a company’s goals. Conclusion Through the process-oriented and dynamic agreement consisting of KPI and SLA, the demands made by DIN EN 15221 and 15222 are met; however, these norm concepts still miss a methodology for determining, modeling, as well as classifying process cycles and how the KPI and the SLA are defined. The concise modelling of processes of a process plan according to the Process Chain Paradigm shows potentials of risks beforehand and indicates possibilities of performance improvement. As a result, the Process Chain Instruments of Dortmund Kuhn, A. and Pielok, T. 1994) offers substantial models, methods, and tools that in combination with a performance measurements system make a dynamic and process oriented Facility Management possible. References Aktas, A. Z., (1987), Structured Analysis and Design of Information Systems. Prentice Hall, Englewood Cliffs, NJ. ARIS Methode – Grundlegende Methodik von ARIS. Handbuch zum Programm, Version 6, September 2001. DeMarco, T., (1987), Structured Analysis and System Specification. Prentice Hall, Englewood Cliffs, NJ. DIN EN ISO 9001 ff, Qualitätsmanagement, Beuth Verlag, September 2004IDS Scheer AG: DIN EN 15221:2005-06 Facility Management - Begriffe; Deutsche Fassung prEN15221:2005, Beuth Verlag, 2005-06 Entwicklung prozessorientierter Instandhaltungsstrategien im FM – vom Gebäudemanagement zum Management der Sekundärprozesse; FACILITY MANAGEMENT; Heft 4/2005; S. 41-45; Bauverlag, Gütersloh, 2005 Industrial Facility Management ein ganzheitlicher Managementansatz – Industrieunternehmen erzielen mit konsequenten IFM viele Synergieeffekte; Zeitschrift industrieBAU; Callwey Verlag; München; Ausgabe 2/2005; S. 58 -59 Kuhn, A.; Pielok, T., (1994), Produktivitäts-Management mit Hilfe von Prozeßketten; In: Qualität und Produktivität; Hrsg.: Wildemann, H.; Frankfurt am Main, 1994, S. 129-138 Lorenz, M., (1992), Strategieorientierte Anforderungsermittlung. Ein Vorgehensmodell zur geplantevolutionären Entwicklung strategischer Anwendungssysteme. Dissertation, TU Berlin. Reisig, W, (1985), Systementwurf mit Netzen. Springer Verlag, Berlin. Ross, D. T. (1985), Applications and Extensions of SADT, IEEE Computer, April 1985: p2534. Scheer, A.-W: ARIS-Toolset: Von Forschungs-Prototypen zum Produkt. in: Informatik Spektrum Heft 19. 1996, S. 71-78. TÜV Instandhaltungsberater Lose Blattsammlung; 25.akt. Liefg. Kapitel 14200, Industrial Facility Management – ein ganzheitlicher Managementansatz, TÜV Verlag GmbH; Köln; S1– 42 VDI 3600, VERBAND DEUTSCHER INGENIEURE; Prozesse und Prozessorientierung in der Produktionslogistik am Beispiel der Automobili ndustrie; VDI-Handbuch Materialfluss und Fördertechnik, Band 7; August 2001

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Process performance model in Facility Management Rene Sigg IFMA Switzerland

Abstract In 2005, IFMA Switzerland launched a project to create a Process and Service Model for Facility Management (ProLeMo), in order to assimilate the results of relevant (actual) developments. Through the ProLeMo project, fundamental principles which promote the standardisation of processes, performance and costs in FM for owner, operator and user were established in a Swiss context. Around 30 project-partners in FM departments supported and participated in the project, so that the results represent a high practical capability and fitness. The Process/Service Model in Facility Management emphasises the management phase and considers interfaces with the construction and operational phases. In this way, the model can be extended in time and outputs/performance dimensions. Different players with different interests come together in the management and use of real estate and services. These participants have defined competences and represent certain roles. The aim of each player is to secure the best they can and for long-term success in the market. The model approach has taken similar views to different roles into account. The processes describe ‘what to do’ and consist of a defined service spectrum. Through the description of quality and methods to the supplier (Service-Level) allocation of use costs takes place through grouping (and allocation to an object structure). The product is defined as a service spectrum of one or more processes and is aligned to the client (e.g. tenant) and customer (e.g. user) within the approach of Facility Management product catalogues in which the outputs of customers are anchored in a holistic approach. With completion of the project in 2007, an integrated process and performance model linked to an utilisation costs structure, and approximately 50 standard processes will be available to the real estate industry. Initial position Compared with Germany or Austria, generally valid bases and definitions in the Facility Management are missing in Switzerland. IFMA Switzerland has promoted corresponding developments for some years in the Facility Management in Switzerland. This gap is filled through the project ‘ProLeMo - process and achievement model in the Facility management'. In addition, substantial national and international developments are considered. Planning instruments eg crbox and IFMA’s cost model for real estate are also integrated with the Swiss Engineer and Architect Association (SIA) project ‘performance schedule for buildaccompanying Facility management '. The European standards for Facility management of the CEN/TC 348 as well as GEFMA guidelines (German Facility Management Association German Federation for Facility Management e.V.) are also important considerations.

Objectives

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A goal is the creation of a constant understanding of all those involved in Facility Management concerning definitions, processes, achievements and costs. In addition a model is developed and verified with examples from the project partners. The project ProLeMo covers the following objectives: • Creation of bases, which improve transparency regarding achievements and costs in the Facility management of owners, operators and users • Development of a standardized and recognized basis for the agency of Facility management achievements. • Fill the process landscape with standard processes and Best Practice examples. • Creation of transparency concerning ‘Switzerland-referred’ terms and definitions also in the alignment with further guidelines of the IFMA, GEFMA and developments in Europe. Facility Management classification The demand for a new way of thinking in the real estate sector developed at the end of the 80's from the realization that, from viewpoint of many owners, the development of value from real estates to small and the economic supply of surfaces, areas respectively. Jobs and services were insufficient. The introduction of the Facility Management in enterprises created the appropriate professionalisation. However practice shows that the term Facility Management is interpreted very differently. Facility management thereby is often equated with the management phase real estate-referred ‘by real estates (SIA 2003, SIA D 0174) and with performance’. This aspect becomes however the comprehensive term and is not at full extent fair. Facility Management refers to the entire life cycle of a real estate (GEFMA 2004, 100-1) and contains all processes, which support the business processes of an enterprise (CEN, EN 15221).

Figure 1: For enterprises, Facility processes can be regarded as the creation of a value chain of support processes, which support the business processes effectively Actors in Facility Management

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In the management and use of real estate services meet one another through the different participants who have different interests. These participants have defined authority and responsibility for a certain role. Participants in the Facility Management have different starting points and different definitions. The project operator authority (BFE 2005) defines the ‘triangle’ of owner/ tenant/user and manager and proceeds thereby from an aspect of the owner. The GEFMA guideline 100-1 (GEFMA 2004, 100-1) speaks within the FM system of a ‘management’ with a clear ‘service provider’. This starting point, detached from real estate, formulates the CEN EN 15221 with a client customer relationship. The role of the customer is to judge the success of the Facility Management on the basis of its products and qualities. The participants have different relationships with each other, which are independent of whether these are by different persons or of the same (legal) person. The goal of each participant is the optimum and long-term safety device of its own free market success. Figure 2 shows the fundamental relationship between client and contractors - of a relationship shows 2 in the context of the Facility management. Depending upon enterprises the participants take different roles.

Figure 2: Relationship of the participants in Facility Management that can occur in different combinations, depending upon enterprises. For example ‘owners and tenants can be identical’, ‘tenants and users can be identical’ or ‘owners, tenants and users can be identical’. In accordance with Figure 2 and following CEN EN 15221, the relations of the participants is as follows characterized:. • The client (e.g. owner) specifies the needs in the context of a Facility management agreement and procures Facility services. • The customer (e.g. tenant) orders Facility services within the conditions of a Facility management agreement and gives these in order. • The service provider (e.g. operator) delivers defined operational performance indicated in the Facility Management agreement. • The user (e.g. co-worker) requires continuous or occasional Facility services. 37

Role models define the relations of the participants within the system boundaries of the process/achievement model in the Facility management. With view of the general beginning after Figure 3 is represented also the roles of further services. The ‘career profile Facility manager’ the IFMA Switzerland (IFMA, 2005) defines the field of the Facility of manager with ‘nine IFMA competencies’. Following the European standard for Facility management of the CEN/TC 348 the achievements of the Facility of manager are arranged into a strategy and a planning/control level.

Figure 3: Role model for the process/performance model in the Facility management with the system boundaries on the ‘management’ phase. Within the role models the participants on a client and to one act contractor level. Within these the performance contribution is assigned to strategy, planning control, and operational levels. Depending upon enterprises and size of the real estate existence a clear differentiation of the roles takes place. Fig. the exemplary conversion of the role model to Fig 4.3 shows enterprise in a firm with specific development. The topic of security is led, in this example, by its own support process, which does not represent part of the Facility Management. This results from the high safety requirements, whatever are attached at the management therefore does not affect the organization directly.

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Figure 4: Exemplary conversion of the role model in an enterprise according to firm specific requirements (BFE 2005) with security as a separate support service. Initial model for processes, performance and costs At the outset, the process/performance model fulfils the following requirements: • aspects of the roles are represented. • processes will become represented by standardized operational sequence and achievements assigned. • utilization costs structure will be supplemented, thus the performance can be assigned • exemplary products are defined. The model beginning for the process/performance model after Figure 5, considers equally the aspects of the different roles. The processes describe ‘which to be done are’ and consist of a defined power spectrum. Through description of the quality and the method to the performance contribution (service level) utilization costs are allocated to groups (and the allocation to an object structure). The product is defined as power spectrum or augmenter processes and is aligned to those who order (e.g. tenants) and receive (e.g. user) performance. With the introduction of the product catalogues in Facility Management the achievements from the view of the customer are embodied in an holistic beginning.

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Figure 5: General model beginning for the process/performance model in the Facility management Processing concept The processing concept follows the new St Galler management model (Rueegg Storming, 2002) by structuring management, business and support processes levels: • The management processes serve for the steering of the business and support processes. • The business processes (performance creation processes) cover achievements for the fulfilment of the customer requirements. • To the support processes internal performance belong to the support of the business processes. However it looks different in the division, in which Facility Management is the core business. In this case, performance belongs to the business processes, since they embody the practical execution of the market-referred core activities of the division, which is directly aligned to the donation of customer use (Figure 6). In the foreground is the temporal prioritization of tasks, the fine tuning of the current task fulfilment in the operational everyday life and the optimization for that management of available resources. From process orientated view, a technical plant or a building in the process of the life cycle goes through different phases and processes, whereby these processes do not occur in a prescribed succession. The impact of these processes comes in each case from strategic planning. This applies in particular to the view of the owner, who preservation is respected. Increase of the total value of the real estate contained in the Portfolio is guaranteed. This is reached among other things by purposeful individual acquisition and liquidation or by several real estate properties as well as their economic management. A starting point for the process/performance model in Facility Management is, in particular, the management phase which is considered as part of the interfaces for the construction and operational phases. Accordingly, the initial model can be expanded in the temporal and performance-related dimension. 40

Figure 6: Processing concept Facility management with system border management as well as the demarcation to production and preservation processes of real estates. The processing concept differentiates planning-/control-and operational processes between the process levels strategy. Performance is assigned to these process levels and the respective sub-processes. The performance arrangement takes place on the basis of the GEFMA 100-2 and/or due to the experience of the project partners. The performance again is co-ordinated with associated costs of the utilization costs structure. In addition, the processes and achievements are arranged in such a way that aspects of the achievement in procuring party/orderer and the service providers are considered. The linkage of the achievements to the utilization costs is the basis for comparisons and thus bench marketable achievements. Performance and utilisation cost structure Performance is the result of processes. In addition the processes and the performance are to be arranged in such a way that aspects of the performance of the procuring party/orderer and the service providers are considered. From view of the tenant and user the cost-performance ratio of its ordered products is crucial. The performance, in accordance with Figure 5, sees assignment of the utilization costs plan. Thus they are available for unification to products. This results in the primary arrangement of utilization costs which take place in cost categories/kinds of achievement. This arrangement should be pure, and not with other arrangement dimensions, as are mixed an arrangement after building, technology and environment. 41

Figure 7 shows the utilization costs structure in accordance with IFMA cost model ( IFMA 2005 ) extended by the cost categories N1 ‘management’ and by N8 of ‘services’ as well as N9 ‘real estate-strange expenditure’.

Figure 7: Current suggestion of the utilization costs structure, which considers the results practice test to the plant and property account plan/use chart of accounts and the project of the ProLe Mo. Prospect In the concluding phase of the ProLeMo project the standardisation of the processes and the allocation of the performance specification will take place. In parallel, alignment of the utilization costs structure (CRB, 2006) will take place. Best Practice examples from the project partners are needed to prove the applicability of the process/performance model. IFMA Switzerland intend to publish the results by the the 3rd Quarter 2007. References BFE Bundesamt für Energie, IEA Internationale Energie Agentur (2005). IEA Annex 40 Betreiberkompetenz. Bern: Bundesamt für Energie. CEN Comité Européen de Normalisation (2005). EN 15221:2006 D: Facility Management – Terms and definitions. Brüssels: CEN. CEN Comité Européen de Normalisation (2005). EN 15221:2005 D: Facility Management – Begriffe (Deutsche Fassung). Brüssel: CEN. CRB Schweizerische Zentralstelle für Baurationalisierung (2006). Praxisbeispiele crbox. Zürich. GEFMA Deutscher Verband für Facility Management e.V. (2004). GEFMA 100-1 Facility Management – Grundlagen. Nürnberg. GEFMA Deutscher Verband für Facility Management e.V. (2004). GEFMA 100-2 Facility Management – Leistungsspektrum. Nürnberg. IFMA International Facility Management Association Schweiz (2005). Kostenmodell für die Immobiliennutzung. V16. Zürich: IFMA Schweiz. IFMA International Facility Management Association Schweiz (2005). Berufsbild Facility Manager. V4. Zürich: IFMA Schweiz. Rüegg-Stürm, Johannes (2002). Das neue St. Galler Management-Modell. Bern: Verlag Paul Haupt. 42

SIA Schweizerischer Ingenieur- und Architektenverein (2003). SIA D 0174 Modelle der Zusammenarbeit: Erstellung und Bewirtschaftung eines Bauwerks. Zürich: sia.

EuroFM Monograph

Facilities Management Processes

Section Two FM PROCESSES: MAPPING Towards a process protocol for FM Andrew Fleming, Angela Lee and Keith Alexander

FM implementation processes supported by IT Bernd Buettner, Torbe Bernhold, Michael May and Frank Riemenschneider

Reference Processes and Internal Control Systems within Facility Management Alexander Redlein and Barbara Giller

43

Towards a Process Protocol for Facilities Management Andrew Fleming, School of the Built Environment, University of Salford, UK. Dr Angela Lee, School of the Built Environment, University of Salford, UK. Prof Keith Alexander, Centre for Facilities Management, University of Salford, UK.

Abstract Researchers at the University of Salford developed a Generic Design and Construction Process Protocol (GDCPP) for construction. It is a high-level process map that aims to provide a framework to help companies achieve an improved design and construction process. This paper describes the adaptation and application of this approach to the field of facilities management. Current work supports the development of European standards in the field and specifically a forthcoming standard in FM Processes. This paper describes the methodology used to develop the processes and explains why a bespoke modelling methodology was developed rather than using the standard process modelling techniques. The methodology enables all of the information relating to the sub processes to be represented as a series of process maps and when viewed holistically, presents an integrated generic decomposition of the processes on the high level map. Keywords: Process, Process Protocol, Facilities Management Introduction Facilities management is still considered a relatively new and underdeveloped discipline in Europe. However, the market for facilities management services is growing and therefore the discipline must further develop its professional competencies and skills, improve its knowledge-base and provide access to reliable methods and tools together with an open sharing of best practice. This will promote recognition and acceptance of how FM services can improve organisational effectiveness by adding value to primary activities in an organisation. FM Processes The foundations for these developments are now being developed through agreement of basic terms and definitions in the creation of a family of standards, one of which focuses on FM processes. FM processes are a key to delivering innovative services to the highest levels of excellence in the developing market in Europe. A definition of FM from a process perspective has been provided by CEN the European Committee for Standardisation and ratified by The British standards Institute (BSI). ‘FM is the integration of processes within an organisation to maintain and develop the agreed services which support and improve the effectiveness of its primary activities’. This paper details ongoing work to identify and map FM Processes to provide a well coordinated, consistent and transparent management framework to all of the stakeholders acting at various points throughout the FM lifecycle, thus providing a ‘map’ of the activities that need to be undertaken throughout the process. The FM Process Protocol aims to aid transparency and identify, gather and assimilate emerging knowledge in a coordinated way. 44

The FM Process Protocol adapts and broadens The University of Salford’s Generic Design and Construction Process Protocol (GDCPP) which provides common definitions, documentation and procedures to allow the multiple organisations involved in construction project delivery to work together (Kagioglou et al, 1998b). The protocol maps the entire project process from the client’s recognition of a new or emerging need, through to operations and maintenance (Cooper et al, 1998; Kagioglou et al, 1998c). The Generic Design and Construction Process Protocol The Process Protocol (see Figure 1.) uses a matrix network technique to model the design and construction process. The matrix is constructed by clustering activities into 8 activity zones along the y – axis arranging elements of the lifecycle into 4 stages containing 10 phases along the x – axis. The phase divisions are called stage gates and they provide a consistent planning and review procedure throughout the process by means of phase reviews, which ensures that the project is continuously co-ordinated and monitored. Within each cell of the matrix it becomes possible to identify the work that must be accomplished for each activity zone or phase, of the project life cycle. Once the necessary elements of each cell have been defined a network of executable items is apparent. This produces a complete process model of the entire project. The activity zones work to optimise themselves to be highly effective across the phases and they are multifunctional consisting of the required disciplines to enact the specific task of the project allowing the goal to drive the process. The use of activity zones in the Process Protocol aims to encourage cross-functional team practice by grouping the participants of a project into core activities, thus overcoming the boundaries of project team segmentation. It is a structured set of processes that guide and support work towards the project's common objective from a multi-functional perspective. The Generic Process Protocol facilitates and encourages customisation for each individual project. The protocol’s knowledge database called the legacy archive enables continuous learning of both the process model and the project (Aouad et al, 1999). In addition to the matrix network the GDCPP also provides the following six key principles (Sheath et al, 1996; Aouad et al, 1998; Kagioglou et al, 1998a; Cooper et al, 1998): 1. 2. 3. 4. 5. 6.

Whole lifecycle view Progressive fixity A consistent process Stakeholder involvement/ teamwork Co-ordination Feedback

GDCPP Principles 1. Whole Lifecycle view Traditionally construction contractors have not assisted in the design phase of buildings. However, it is argued by Gunaskaran and Love (1998) that their involvement in this phase would be invaluable. Therefore the protocol aims to bring together both the design and the construction activities by introducing those who do 45

the building earlier into the design phase, into the front-end, or by improving the design-construction interface. This thus becomes the first principle of the Process Protocol. The whole project should be clearly planned out as far as possible allowing the production team to be appointed early in the process, and when required, to contribute to the design process to effectively utilise resources. Comprehensive requirements capture is essential at the front-end of the process to identify, define and evaluate client and stakeholder requirements. 2. Progressive fixity The stage gates (Cooper, 1994; see section 2.6.1) apply a consistent planning and review procedure throughout the Process Protocol. It accommodates for the progressive fixing and/ or approval of information throughout the process, and allows the concurrent working of design and construction activities in order to reduce time. This is particularly useful for commercial clients who may have to change the design/ specification of the building project at a late stage of the project to accommodate for their changing market needs. The clients will have to pay for the additional risk and cost of progressively fixing the design elements, for example, the foundations for the project maybe over compensated for the potential of increasing the capacity, but greater flexibility is endorsed. 3. A consistent process Kuczmarski (1992) states that using the same basic generic process should uniformly yield the most productive results. Everyone involved in the process should also develop a comfortable and consistent level of working which in turn allows all employees to envision the progress of an idea through to the end product, a key component of success (Kucmarski, 1992). However, the generic process is not static (Thomas, 1995) as it too is subjected to continuous improvement. The most important underlying factor to any development process is making it understandable and actionable by all people concerned. Consistency in the way the process is interpreted and followed is vital. 4

Stakeholder involvement/teamwork The involvement of the client and all the stakeholders in a project is a prominent feature of the Process Protocol and follows the clear consensus in manufacturing reports that full team participation improves the process. Success is also very much a multidisciplinary, multifunctional effort (Cooper & Klienschmidt, 1995; Arditi & Gunaydin, 1998; Griffin, 1997). In order to achieve this, every step or phase has to be a multifunctional one. By cutting across functions and assembling all of the employees working on the same project into a ‘team,’ companies aim to reduce disputes among functions, pre-empt problems, and unleash the energy and effort that people give when contributing to a meaningful project (Griffin, 1997).

4. Co-ordination Co-ordination is essential if conflicts are to be avoided. Successful teams bring together diverse information on every aspect that impacts customer satisfaction and 46

they overcome the shortcomings of hierarchical structures and generate quality decisions (Hoffman, 1979). This sharing of common information and facilitation of real-time communication are linchpins for the success of this process. It is all too well to have a precise and accurate process in play, but if the participants do not interact to produce the set deliverables then there is no success. 5. Feedback Expert knowledge and lessons learned in construction must be effectively harnessed and incorporated back into the process, so that knowledge may be passed from project to project or even from person to person in order to gain real benefits in cost, schedule, quality and safety. (Kartam, 1996; Kumaraswamy & Chan, 1998). The Process Protocol actively encourages integrated learning by means of a legacy archive; a central repository or information spine (Hinks et al, 1997) that can take the form of an electronic information management system. Everyone in the project has access and contributes to the project data, thus enabling project co-ordination and communication to inform the latter phases and future projects. Furthermore, competitive advantage will effectively come from how such experiences are acted upon (Hinks et al, 1997; Aouad et al, 1999). The archive follows the notion of continuous improvement that is commonly associated with the PDCA cycle.

47

OPERATION & MAINTAINANCE

Revise Project Brief

Revise Business Case

Revise Business Case

Revise Business Case

Revise Project Brief

Revise Project Execution Plan

Revise Project Execution Plan

Assess stake-holder involve-ment

Assess site & environmental issues

Define key systems and criteria

Prepare Concept Design Brief

Revise site & environmental issues

Outline Planning Approval

PROCESS MANAGEMNT

Inform on statutory criteria and regulatory issues

Establish need for a project

Prepare outline Business Case

Prepare Process Execution Plan

Prepare Project Brief

Phase Review Feedbac Report k PROCESS MANAGEMENT/ CHANGE MANAGEMENT

Revise Business Case

Undertake feasibility Study for each option

Revise Process Execution Plan

Phase Review Feedbac Report k

Revise Project Brief

Phase Review Feedbac Report k

Revise Business Case

PHASE review

Prepare Full Concept Design

Revise CDM assessment

Revise Project Brief

Revise Business Case

Revise Process Execution Plan

Phase Review Feedbac Report k

Finalise Cost Plan

Finalise Co-ordinated Product Model

Liaison with other Activity Zones

Figure 1: The Process Protocol high-level map (Kagiouglou et al, 1998a)

48

Prepare work packages

Produce Product Model (co-ordinated design)

Revise Project Brief

Revise Business Case

Revise Process Execution Plan

Revise Maintainance Plan

Phase Review Feedbac Report k

Revise Business Case

Finalise Co-ordinated Product Model

Finalise Project Brief

Phase Review Feedbac Report k

Finalise Business Case

Undertake Post Project Review

Ongoing review of Facilities Lifecycle

Manage & undertake constrction activities

Start enabling works

Finalise Health & Safety Plan

Revise Process Execution Plan

Monitor Cost & Quality

Develop Operational Product Model

Procure work package suppliers

Revise CDM assessment

Revise Project Brief

Ongoing Review Of Facilities Lifecycle

Monitor Procurement

Monitor Cost & Quality

Prepare Cost plan

Revise CDM assessment

Phase Review Feedbac Report k

USE & CREATION OF LEGACY ARCHIVE

Prepare Maintainance Plan

Procure work package suppliers

Produce Product Model (coordinated design)

Detailed Planning Approval

Prepare CDM assessment

Revise Process Execution Plan

Revise site & environ-mental issues

Undertake Post Project Review

Manage on-site resources & labour

Develop Operational Product Model

Revise and implement

Manage Health & Safety

Finalise Process Execution Plan

Implement Handover Plan

Phase Review Feedbac Report k

Phase Review Feedbac Report k

FEEDBACK TO OTHER PROJECTS VIA LEGACY ARCHIVE

HEALTH & SAFETY STATUTORY AND LEGAL MANGEMENT

Prepare Full Concept Design

Inform Design Process

PHASE review

Prepare Design Brief

PHASE review

FACILITIES MANGEMENT

PHASE review

PRODUCTION MANAGEMENT

Revise Project Execution Plan

Implement Handover Plan

Finalise Business Case

Finalise Project Execution Plan

Revise Procurement Plan

Prepare Cost plan

Prepare Outline Concept Designs

Finalise Project Brief

Revise Project Execution Plan

Revise Procurement Plan

Prepare Cost plan Assess site & environmental issues

Prepare Design Brief

Revise Business Case

Revise Project Brief

Revise Project Execution Plan

Revise Procurement Plan

Prepare Procurement Plan

DESIGN MANAGEMENT

Revise Business Case

Revise Project Brief

PHASE review

Undertake feasibility Study for each option

Revise Project Execution Plan

PHASE review

FEEDBACK FROM CURRENT & PAST PROJECT

Revise Business Case

Prepare Project Execution Plan

PROJECT MANAGEMENT

RESOURCE MANAGEMENT

Prepare Project Brief

PHASE review

Prepare outline Business Case

HARD GATE

PHASE NINE

CONSTRUCTION

SOFT GATE

PHASE EIGHT

PRODUCTION INFORMATION

HARD GATE

PHASE SEVEN

COORDINATED DESIGN, PROCUREMENT & FULL FINANCIAL AUTHORITY

HARD GATE

PHASE SIX

FULL CONCEPTUAL DESIGN

SOFT GATE

PHASE FIVE

OUTLINE CONCEPTUAL DESIGN

HARD GATE

PHASE FOUR

SUBSTANTIVE FEASIBILITY STUDY & OUTLINE FINANCIAL AUTHORITY

SOFT GATE

PHASE THREE

OUTCOME FEASIBILITY

SOFT GATE

PHASE TWO

PHASE review

Establish need for a project

PHASE ONE

CONCEPTION OF NEED

PHASE review

DEVELOPMENT MANAGEMENT

PHASE ZERO DEMONSTRATING THE NEED

SOFT GATE

Liaison with Process Manager

FM Process Protocol Development The GDCPP offers a robust framework in which to develop and structure the FM Processes. It is an open source framework that does not require proprietary software and represents processes / sub processes in a non technical representation. The GDCPP activity zones, stages and phases will be adapted to an FM Process Protocol. In order to identify the scope of FM and its main activities a data collection exercise was conducted which consisted of; literature reviews that focussed on current FM practice, consultations with FM experts and the facilitation of a workshop attended by private and public sector Facility Managers. The collected data identified the key issues to be considered in relation to Facility Management. This data was analysed to identify activities that related to Facility Management. These were highlighted and subsequently reviewed and clustered into activities that would be undertaken during the Facility Management lifecycle. The identified high level activities are contained within Figure 2.

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Asset management

•

Health & safety management

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Programme management

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Benefits realisation mgt

•

Knowledge management

•

Project management

•

Business definition mgt

•

Legal management

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Quality management

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Business planning and dvpt

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Lifecycle management

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Regulatory management

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Change management

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Maintenance management

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Resource management

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CSR management

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Media management

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Risk management

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Environment Management

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Performance management

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Service delivery management

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Financial management

•

•

Stakeholder management

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HR Resource management

Primary and secondary process alignment management

ICT management

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Process management

•

•

Standards and terminology management

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Innovation management

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Procurement and logistics management

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Strategic, tactical and operational management

•

Value management

Fig. 2. The identified high level activities associated with FM A number of these activities are included in best practice management systems. Activities such as project management and resource management are well established and documented. Typically a framework is developed for these activities that outline the process for their execution. Depending on their nature, activities can be consistent throughout a process or alter according to phase. Activities were also identified that were specific to FM. Business definition management identifies primary processes and activities and also support processes, 49

external factors and internal capabilities to aid understanding of the organisation. Primary and secondary process alignment management aligns and integrates the support infrastructure with primary business activities. Asset Management identifies the facilities assets and manages them according to the needs of the client organisation. Service Delivery Management ensures that the procured physical and soft services are delivered according to the client organisations needs. Many of the issues that arose such as, co-ordination, transparency, consistency, continuous improvement and knowledge management are also issues that the construction industry faces and were previously considered during the development of the GDCPP. Therefore, it was felt that the GDCPP could be adapted to form a suitable framework for a Facility Management process. FM Process Protocol Stages The high level activities in Figure 1 were initially grouped from a strategic, tactical and operational facilities management perspective into six stages that represent business cycles, see Figure 3.

6. Maintain and operate support infrastructure 1. Identifying Business Requirements 5. Implementation of support infrastructure and capability

The Six Stages of the FM Process Protocol 2. Developing FM Policy and Strategy

4. Developing and Integrating Business Support

3. Alignment

Figure 3. The Six Stages of the FM process Protocol 1. Identifying Business Requirements 50

This stage aims to provide guidance on how to achieve a thorough understanding of the client organisation. It prompts an organisational review to identify primary processes and activities. It also reviews internal and external organisational factors that may impact the organisation. The organisational strategy is also identified and reviewed in terms of its aims, objectives, policies, mission and vision statements and value statements. At this point it should be possible to define the primary and non primary business activity. The organisations stakeholders and their requirements are identified and assessed according to their impact to the organisation. Further reviews are conducted to consider organisational management, drivers, deliverables and critical issues. The final stage of this process is to identify the support requirements of the primary business activities. 2. Developing FM Policy and Strategy At this stage some degree of organisational understanding should have been reached to determine FM policy and strategy. 3. Alignment This stage aligns the FM Policy and strategy with the organisational requirements. The following support objectives are defined; costs, space optimisation, CSR, portfolio management, business continuity, benefits management, performance and innovation. 4. Developing and Integrating Business Support This stage develops the support capability after the business identification and definition activity has occurred. It attempts to develop a support capability that is based on the needs of the primary business activities. Where appropriate it is integrated into the business infrastructure to provide dynamic seamless support. 5. Implementation of support infrastructure and capability The activities within this stage implement the support infrastructure and monitor the following frameworks: project management, communication, performance management, stakeholder management, change management, customer relationship management and risk management. 6. Maintain and operate support infrastructure This activity monitors support requirements and capabilities to ensure that the support infrastructure is continually aligned and integrated with the primary business activities. It monitors performance and evaluate services that are being provided.

FM Process Protocol Phases Each stage was then populated with further levels of detail which were arranged in a hierarchy of three levels. They were presented for feedback to FM experts who suggested that the key issues had been identified. The six stages were then considered in terms of the phases that they would contain and the sequence of these phases. Ten phases were developed that embrace the principles of the six stages while providing a further level of detail regarding the sequencing of the FM Process Protocol’s enactment, see figure 4. The stages and the phases will line the FM Process Protocol’s x – axis.

51

•

Phase 0, Organisational Preparedness:

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Recognition of and consideration of all triggers for organisational change. Considers organisational lifecycle issues. Phase 1, Organisational Understanding:

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Activities undertaken to ensure that all aspects of the organisation are understood. Phase 2, Organisational Definition:

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Organisational policy and strategy re/ defined. Phase 3, FM Definition:

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FM policy and strategy re/ defined. Phase 4, FM strategy development:

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FM to develop a strategy to align with organisational approach Phase 5, Define Support Infrastructure:

•

Define the capacity and capabilities of support infrastructure. Phase 6, Develop Support Infrastructure:

•

Development of an environment that supports the organisation and allows business opportunities to arise. Phase 7, Integrating Business Support:

•

The support capability integrated into the business infrastructure to provide seamless dynamic support. Phase 8, Implement Support capability:

•

Tactical implementation Phase 9, Maintain and Operate Support Infrastructure: Monitor alignment of support processes with primary processes. Monitor organisation and maintain awareness of organisational change triggers.

Figure 4. The Ten Phases of the FM Process Protocol FM Process Protocol Activity Zones 52

Once the phases had been developed, the activity streams / zones that the processes would reside in were developed, see Figure 5. According to Kagioglou (1998) these activity zones contain ‘a structured set of sub processes involving tasks which guide and support work towards a common objective.’ The zones are function based rather than role based and ‘Activity zones generally overlap and are interactive.’ The identified FM activities were clustered into activity zones that consider; the relationships of all the stakeholders to the FM process; the issues relating to the management of the programmes of FM activity such as quality and risk; the management of resources; business, planning, development and implementation issues; lifecycle issues; statutory compliance and social responsibility and finally process management issues. The activity zones will line the FM Process Protocol’s y-axis. The FM Process Protocol Activity Zones Stakeholder (Relationships) Management This activity zone acts on behalf of the stakeholders to ensure that FM is undertaken in the most effective fashion. The activities that it consist of are: Stakeholder identification, classification and management, Stakeholder relationship Management (Community Relationship Management, Customer Relationship Management, Client relationship Management, User relationship Management, Human Resource Relationship Management). Programme Management Once a programme of activity occurs this activity zone undertakes all required programme management activities and ensures all programme and project tools are selected and implemented correctly. The activities that it consists of are: Quality Management, Value Management, Risk Management, Performance Management, Media Management, ICT Management, Knowledge Management Project Management Resource Management Programmes of FM activity require adequate resourcing. This activity zone manages these resource requirements. The activities that it consists of are: Financial Management, Asset Management, Maintenance Management, Procurement and Logistics Management. Business Planning and Development: Effective Facilities Management must be undertaken in alignment with the business it is supporting. This activity zone deals with all aspects of business planning and development. The activities that it consists of are: Business Planning, Business Development, Change Management, Business Strategy. Implementation: This activity zone manages the implementation of the FM programmes. It primarily focuses on the activity of Service Delivery Management. Lifecycle Management: It is important to consider lifecycle issues to ensure that decisions taken in the short term do not negatively impact on decisions taken in the long term. This activity zone assists in the transition stages between planning and implementation. The activities that it consists of are: Strategic, Tactical and Operational Management, Innovation Management and Benefits realisation management, Health, Safety, Statutory, Legal and Environmental Management: At all stages of the FM process it is important to ensure that statutory requirements are complied with. In addition it is also important to consider that social and environmental considerations are also observed. This activity zone considers all aspects of health, safety, governance, liability, accountability and environmental issues. The activities that it consists of are: Health and Safety Management, Legal Management, Regulatory Management, Standards and Terminology Management and Corporate Social Responsibility (CSR) Management. Process Management: It is important to ensure that the process is undertaken correctly, by the right people, in the right order and to the right standard. This activity zone will manage how the process is developed, managed and executed. The primary activity that it consists of is: Process Management activity.

53

Fig. 5. The activity clustering of the key issues of Facilities Management

Summary This paper has described how an existing generic process map has been adapted for the purposes of developing and structuring a process for facilities management and provides a high level overview of how the stages, phases and activity zones will be structured, see Fig 6.

x- axis

Stages Phases y - axis Activity Zones

Figure 6. The FM Process Protocol High Level Overview

Further work is scheduled to further define sub processes through testing on industry cases and to explore activity boundaries, content, terminology, barriers to acceptance and contextualisation. It is envisaged that the FM Process Protocol will serve to provoke discussion and thought in the FM arena while providing a mechanism to help organisations enhance their FM capability in line with industry standards.

References Aouad, G., Hinks, J., Cooper, R., Sheath, D., Kagioglou, M. & Sexton, M. (1998) An IT Map for the Generic Design and Construction Process Protocol. Journal of Construction Procurement, 132-151. Aouad, G., Kagioglou, M. & Cooper, R. (1999) IT in Construction: A Driver or and Enabler? Journal of Logistics and Information Management. Awaiting publication. Arditi, D. & Gunaydin, H. M. (1998) Factors that Affect Process Quality in the Life Cycle of Building Projects. Journal of Construction Engineering and Management, 124(3), 194-203. Cooper, R. G. (1994) Third-Generation New Product Processes. Journal of Product Innovation Management. 10, 6-14. 54

Cooper, R. G. & Kleinschmidt, E. J. (1995) Benchmarking the Firm's Critical Success Factors in New Product Development. Journal of Product Innovation Management, 12, 374391. Cooper, R., Kagioglou, M., Aouad, G., Hinks, J., Sexton, M. & Sheath, D. (1998) Development of a Generic Design and Construction Process. European Conference on Product Data Technology, BRE, 205–214. Griffin, A. (1997) PDMA Research on New Product Development Practices: Updating Trends and Benchmarking Best Practices. Journal of Product Innovation Management, 14, 429-458. Gunasekaran, A. & Love, P. E. D. (1998) Concurrent Engineering: A Multi-Disciplinary Approach for Construction. Logistics Information Management, 11(5), 295–300. Hoffman, L, R. (1979) The Group Problem Solving Process: Studies of a Valance Model. Praeger, New York. Kagioglou, M., Cooper, R., Aouad, G., Hinks, J., Sexton, M. & Sheath, D. (1998a) Final Report: Generic Design and Construction Process Protocol. The University of Salford, Salford. Kagioglou, M., Cooper, R., Aouad, G., Hinks, J., Sexton, M. & Sheath, D. (1998b) A Generic Guide to the Design and Construction Process Protocol. The University of Salford, Salford. Kagioglou, M., Cooper, R., Aouad, G., Hinks, J., Sexton, M. & Sheath, D. (1998c) CrossIndustry Learning: The Development of a Generic Design and Construction Process Based on the Stage/Gate New Product Development Process found in the Manufacturing Industry. In Proceedings of the Engineering Design Conference, Brunel, UK. Kartam, N. A. (1996) Making Effective Use of Construction Lessons Learned in Project Life Cycle. Journal of Construction Engineering and Management, March, 14–21. Kuczmarski, T. D. (1992) Managing New Products: the Power of Innovation. Prentice Hall, USA. Kumaraswamy, M. M. & Chan, D. W. M. (1998) Contributors to Construction Delays. Construction Management and Economics Journal, 16(1), 17–29. Sheath , D. M., Woolley, H., Cooper, R., Hinks, J. & Aouad, G. (1996) A Process for Change: The Development of a Generic Design and Construction Process Protocol for the UK Construction Industry. In Proceedings of the CIT Conference, Institute of Civil Engineers, April, Sydney, Australia. Thomas, R. J. (1995) New Product Success Stories: Lessons from Leading Innovators. John Wiley & Sons, New York.

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FM implementation processes supported by IT Bernd Buettner Michael May University of Applied Sciences Berlin, Germany Torben Bernhold Frank Riemenschneider, University of Applied Sciences Muenster, Germany

ABSTRACT A successful implementation of integrated facility management and as a part of it Computer Aided FM is not yet state-of-the-art. The knowledge of the to-do’s and their processes behind are essential in order to achieve this aim. Previous approaches are mostly based on general recommendations rather than structured methods. In the beginning there is often a lack of information and knowledge to perform a complex FM implementation project. Consequently, many projects fail or don’t succeed. To define and structure the FM implementation processes which are based on empirical studies is therefore the main task. This implicates developing integrated process models to ensure a successful FM implementation. As a consequence, the research project FM-ASSIST develops a computer-based software system which is supposed to support FM users and consultants in implementing FM efficiently. This innovative approach is based on the novel facility management Implementation Model which was devised during the project. Based on case studies, and sophisticated interviews with experts from different FM fields, and the relevant literature an integrated best-practice process model was developed, containing all relevant facility management implementation processes. The formalization of the model is based on a simple but qualified method that allows representing implementation processes in general.

GENERAL PROJECT DESCRIPTION Origin and problem description Both private industries and the public sector are concentrating the allocation of their resources to an ever greater extent in the areas of their core competencies, i.e. core business (Sasse and Zehrer, 2004; Quinn and Hilmer, 1995; Prahalad and Hamel, 1990). Just as the core business processes have already been increasingly professionalized thanks to methods and concepts like target costing and continuous process improvement, processes supporting the core business offer great potential for cost reduction (Poell, 2007). Real estate represents the major part of the fixed assets (Smith, 2003) of most commercial enterprises and is at the same time a major portion of the assets of nearly all local authorities (Brockhoff and Zimmermann, 2005). Because of its economic impact, real estate is indispensable for smooth functioning of the core business. Since the production component is generally lacking in public projects, as a rule the acquired assets are indirect items (Kosilek, 2004) needed for the maintenance of the operation (e.g. services in the area of MRO-goods) (Jackson et al., 1995). 56

Optimization of support services has increased in recent years primarily due to dramatically changing environmental conditions that organizations face (Connors, 2003; Mudrak et al., 2004; McLennan, 2004; Barrett, 1995; Nutt, 1999; Tay und Ooi, 2001; Alexander, 2003). In comparison with private corporations confronted with increasing competition, shortened product life-cycles etc. the public sector has, to a great extent, not yet begun to exploit the potential offered by a comprehensive (municipal) FM, as is illustrated in Figure 1. Table 1. Implementation status of FM in German municipalities; adopted from (Bernhold, 2007) Implementation status of a facility smaller municipality management in the using phase (building management in according to DIN number of in % 32736) responses

bigger municipality (over 16.350 inhabitants)

number of responses

in %

Aggregate

number of responses

in %

not

72

21,18%

31

9,25%

103

15,26%

partial (at approach)

170

50,00%

126

37,61%

296

43,85%

advanced

43

12,65%

59

17,61%

102

15,11%

extensive

34

10,00%

49

14,63%

83

12,30%

nearly complete

16

4,71%

55

16,42%

71

10,52%

squarley

5

1,47%

15

4,48%

20

2,96%

100,00%

335

100,00%

675

100,00%

Aggregate (n = 675)

340

Although various projects in the public sector have confirmed that the benefits achieved are not directly quantifiable, particularly in small municipalities, increasing professionalism has achieved major gains in efficiency, thanks to e.g. the reduction in the number of points of contact necessary or by promoting cost consciousness based upon an integrated landlord/lessee model. Since basically every organization makes use of certain premises and services in manufacturing their products, FM can be described as a fundamental function of the enterprise (EC, 2004). Due to the fact that FM must be integrated into the core business strategy, or is directly derived from it, it can, to a certain extent, be viewed as an autonomous subsystem of the business. In addition, it functions as the intermediary between internal requirements and market-related factors. Balancing these bipolar tensions is one of the defining characteristics of FM. In this way, FM’s function systematically ties the core business activities to the facility processes (van Wagenberg, 2003). Figure 2 explains this relationship. Considering the complexity of the professional study of FM, the decision to introduce and implement it necessitates a systematic approach. However, at present there is no uniform, scientifically accepted procedural framework. This can be explained to some extent by the fact that patterns of demand (e.g. the differentiation between core and supporting processes, organizational structures, attitudes towards outsourcing, application of specific software systems) differ from business to business and from municipality to municipality, in spite of 57

the fundamental pan-organizational function of providing building and personnel related services (Chotipanich, 2004). Moreover, organizational and/or political interests, as well as the cost of implementing FM (e.g. for consultants, software, etc.) often prevent the successful and comprehensive realization of the introductory process.

Figure 1. FM-function as an intermediate function; adopted from (van Wagenberg, 2003)

Project description, objective and target groups Meanwhile, it has been proved in the context of many projects that the successful implementation of an FM strategy leads both to cost reductions and improved value maintenance of real estate, as well as more transparent structures and processes. The knowledge of how this implementation can be supported efficiently and successfully has so far tended to be examined much more in practical settings than from a scientific point of view. Because of the predominantly cross-organizational or interdisciplinary importance of FM processes the support of external consultants is often called upon to assist in the implementation process. To date there is no systematic computerized user support enabling a step-by-step implementation of FM. Thus, there are some objectives that are followed with our research: 1. Global objective a. Development of an intelligent software tool to support decision processes within the context of the implementation of facility management. b. FM-ASSIST is intended to assist both individual users and consultants in a structured and systematic manner towards the successful FM implementation. c. General software solution for modeling implementation processes independent of specific knowledge domains. 2. Essential individual goals a. Development of a procedural framework offering a fundamental description of the methodology within the context of the FM implementation processes b. Development of reference process models describing in detail the procedure of introducing FM. c. Realization of a flexible software tool and field test. 58

d. Supplying information and knowledge in support of both the FM implementation and the „informed“ user. The German Federal Ministry of Research and Education (BMBF) has awarded the FHTW Berlin (University of Applied Sciences) and the FH Muenster (University of Applied Sciences) as well as partners from the private and public sector a grant to develop an interactive, computerized and knowledge-based “Assistance System” that assists users and consultants in implementing FM successfully in an organization. This system must be based on a general model for the FM implementation. The procedural framework for the introduction of FM is being developed with particular emphasis upon “best-practice examples” and problem analysis. These models lead to systematic approaches that form the knowledgebase for the envisioned „Assistance System“. FM-ASSIST is being developed as an intelligent decision-support software tool intended to assist both individual users as well as consultants in a structured and systematic manner in the development of concrete implementation processes and phases, supplying them with recommendations based on an interactive user questionnaire for planning and effecting the introduction of FM, while helping them to avoid mistakes and ensuring the success of their projects. This subject appeals both to businesses and the organizations in the public sector wishing to inform themselves about the fundamental technology, but who at present do not have the funds to hire a consultant. At the same time, FM consultants as well as human resources development organizations will profit from the envisioned system. FM users receive important FM knowhow, recommendations for implementation and procedural frameworks. FM consultants can apply their implementation strategies systematically and help to create an important pooled knowledgebase. Educators and students alike receive an ideal tool for the simulation of complex FM procedural frameworks.

METHODOLOGICAL APPROACH Procedural framework for the implementation of FM A systematic approach to such complex processes as the introduction of FM can be analyzed into a system which comprises individual sub-processes and categorizes them according to context. The delineation of such a basic process is called a „procedural framework”. Procedural frameworks also form the basis for constructing reference frameworks. In the course of developing a procedural framework for FM implementation, we first investigated previously published approaches. On the one hand, two models taken from the municipal field were examined, one a model used by the KGSt (KGSt, 2003) and one taken from the guidelines of the banking association, the Ostdeutscher Sparkassen and Giroverband (OSGV) (OSGV, 2002). On the other hand, two implementation models taken from private industry were analyzed: the procedural framework contributed by Preuss and Schoene (Preuss and Schoene, 2006), and the Chotipanich (Chotipanich, 2004) model. An evaluation was made possible by defining various parameters according to which the models can be evaluated and compared with each other. These parameters were categorized on the following three levels: 1. Structural requirements 2. Basic conditions and project management 59

3. Content requirements The first parameter was used to test whether the implementation models proceed in phases. In order to determine which of the second-level factors exert an irresistible influence upon the FM organization (basic conditions), project reports and special practice-oriented case studies within the context of existing FM organizations were examined (KGSt-Report, 10/2004). In contrast, field reports documenting earlier FM implementations were examined and analyzed in search of problems that had occurred, in order to reveal the corresponding factors (Gaenßmantel et al., 2005; Bolay, 2006; Hink et al., 2004; Ecke, 2004). The constraints identified by this research were distinguished according to whether they related to internal influences or environmental conditions, i.e. those considered from the perspective of the FM organization to be susceptible to influence, and those that are considered to be very little or not at all susceptible to influence from the perspective of the FM organization (Chotipanich, 2004; KGSt-Report 10/2004). These constraints become particularly relevant during the course of a FM implementation process, because the responsible agents are often confronted by them while carrying out the reorganizational measures. Moreover, it was also imperative to determine a parameter on this level that indicates to what extent a project management was contained. On the third evaluation level, the designated implementation models were examined regarding the content structure of the various phases. The following elements were identified: 1. An overall strategy for all facility support processes. 2. An integrative FM organization and the process orientation in relation to core and support processes as well as process/performance standardization focused upon the choice of the type of organization and legal form, as well as distinguishing core processes from supporting processes. 3. The provision of up to date and consistent data as a basis for all strategic and operational decisions (May, 2006). 4. IT support, in particular the optimization of data access and the prevention of redundancies (Brockhoff and Zimmermann, 2005; May, 2006). 5. A management for FM processes and FM services (the character of FM-process and service management forms important area of facility management, particularly in relation to user demands/quality measurement/management (SLAs, implemented KPIs); outsourcing considerations and service agreements (service and supply management, profitability analysis, maintenance management etc. (DIN EN 15221; CRC 2006)). One parameter was assigned for each of these elements, except for the element FM organization, which was assigned separately. A comparative study of the four models is contained in (Bernhold et al., 2007).

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Figure 2. Procedural framework of an FM implementation; adopted from (Chotipanich, 2004)

Derived from the results of these studies, an organizational framework for the implementation of FM (see Figure 3) was developed based largely upon the Chotipanich model. Appraisal of the procedural framework by means of expert interviews In order to test the applicability of the organizational framework developed, various organizations were surveyed. The survey was carried out in the form of personal interviews, since interactive dialogue offered the best way of producing the qualitative knowledge necessary to validate the results of the study. In the introductory section of the survey, basic data were recorded and a common semantic basis was defined. The second, narrative section posed the question of how the subject conducted the implementation of facility management in the corresponding organization. At the same time, the general problems arising in the course of the process as a whole were pursued and discussed with the subject. In the third section, the procedural framework developed was presented in order to be verified in the course of the subsequent open discussion, or to collect tips and recommendations for its further optimization. Results of the expert interviews In the course of the interviews, it became apparent that the introduction of FM into the municipal environment presupposed the participation of many different groups who, in turn, are motivated by divergent interests, thereby increasing the overall difficulty of the introduction of the FM. Moreover, FM is not perceived as an essential function of the organization in this sector so that the responsibility for its execution is in many cases distributed among de-centralized administrative units. As a result, FM’s contribution to achieving administrative goals (e.g. cost reduction) is only partially recognized. Owing to the prevailing state of decentralized organization, the use of CAFM systems for supporting various, pan-organizational FM services is also very heterogeneous, so that a uniformity of data is not to be found. Furthermore, the implementation of CAFM systems is often effected without exact knowledge of the processes the software is intended to support. 61

Finally, the interviews reconfirmed the conclusion arrived at by observation of previous FM organizational frameworks that an organizational structure is often delineated before the derivation of the functional FM strategy and additionally showed that the cause of such an approach is usually political in character. Overall it seems reasonable to assume that the essential results would also be valid for private businesses. Although the results of the interviews illustrate the fact that each interview subject is usually confronted by different obstacles to the practical execution of the FM implementation, which thus conform to no uniform structure, the fundamental structure of the theoretical organizational model developed met with full approval.

INFORMATION MODELING Reference process modeling Following the development and verification of the organizational framework, the subsequent text will illustrate the individual reference processes of the various phases and modules. To this end, structures and workflows are examined and the results expressed graphically and process-oriented in the form of flow charts. The goal of this reference process modeling is the detailed visual representation of information and knowledge. Within the FM-ASSIST system, graphic process modeling is applied with reference to Event-driven Process Chains (EPC) (Keller et. al, 1992). The individual phases or modules of the organizational framework are then displayed at different levels of detail. This modeling is intended to offer clients a structured knowledgebase as a roadmap with which they can systematically plan and carry out the complete FM implementation based upon the contingencies of their own systems. Within an EPC, the roles played by the objects portrayed shift in meaning between results on the one hand, and functions on the other. An event verifies in this context a certain state of the software user. Functions represent the object types within the process chain that can either depict the activities to be executed by the user or recommendations for action or for the description of the FM processes. Reference process modeling for the implementation of facility management The starting point for process visualization is the procedural framework for the implementation of facility management and reveals the fundamental structure of the introductory process with reference to an abstract model. Reference process modeling serves to further differentiate and precisely delineate the procedural framework. The next step is to choose the type of model. The model type represents the particular notation to be used for reference process modeling. In FM-ASSIST the processes are graphically depicted on the basis of the Event-driven Process Chain model, while functions, events and logical connectors form the building blocks of EPCs in FM-ASSIST. Here functions represent activities, transmit input and output data and are empowered to make decisions determining subsequent process flow. Within the project, functions are depicted by previously executed activities or pending activities (recommendations for action), e.g. “Have you already defined your FM processes 62

as support processes?” Functions lead to events, which in turn depict attributes of flowrelated states. Within FM-ASSIST a binary instantiation occurs in the form of a Yes/No attribution. Events, e.g. “FM-processes not yet depicted” trigger functions and serve to document the processing of one or several functions. To this extent they describe the progress of the FM. Further differentiation and description of the reference processes are realized through the establishment of a hierarchical structure. Here complex situations are analyzed into smaller and therefore less complex aspects. In this way, the systematic analysis of a problem-solving procedure with reference to semantic aspects implies three fundamental advantages: 1. Structure of the knowledge is independent of the knowledge domain, which can also be processed with the algorithms and data structures in current information technology. 2. Suitable representation of knowledge, which can at any moment be reproduced in order to enable the verification of the decisions made. 3. Reduction of the complexity of a situation. The hierarchical decomposition of a plan for implementation is accomplished in the FMASSIST project by means of function decomposition diagrams. Following the function decomposition, the processes for the FM-implementation are modeled hierarchically (Figure 5). FM-ASSIST is an IT solution for guiding the user through the entire implementation process by supporting his or her specific decision processes. At the same time, users always have the option of directly retrieving information about individual activities (e.g. GEFMAGuidelines, Definitions, DIN-EN-Standards).

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In order to continuously make recommendations for action, as well as making system help and general information available to users (e.g. in what order which implementation activities still need to be carried out), the respective individual current status of the project is measured against the nominal reference process as modeled in FM-ASSIST. The resulting recommendations enable the user to work out additional measures for planning the implementation process. 63

Independent knowledge representation by means of a software framework On the basis of the project’s stated objective to develop a software solution that is universally valid for arbitrary implementation plans, the development of the assistance system with the working out of a software framework is repositioned on a more abstract level. This in turn enables the representation of implementation processes stemming from widely disparate knowledge domains. The concrete software framework discussed in the present project is called “PDM-Assist” (“Process Driven Method”) (Bernhold. et. al., 2007). The essential basis for the development of the software framework is to be found in the hierarchical structuring of the problem as a whole, because the representation of the hierarchical process model in a database-enabled data structure functions independently of the actual contents of the implementation processes. Thus the framework PDM-Assist offers the expert in a particular domain of knowledge the possibility to develop implementation processes and to model them according to the rules of the hierarchical process structure. After completion of the representation of the implementation processes, an independent assistance system is generated from within the software framework. This specialized assistance system will then be in a position, just like FM-ASSIST (see point 3.2), to guide a user through an implementation plan and to offer the support of additional information and elucidations.

PERSPECTIVE Additional expert interviews are required in order to test the plausibility of the theoretical development of the reference processes against a real-life standard. In the course of subsequent development of the BMBF research project FM-ASSIST, individual phases, or modules, of the procedural framework are analyzed into smaller, less complex functions, in order to facilitate depiction and visualization, while ensuring that all relevant aspects, both internal and external influences and environmental conditions are taken into account. Decomposition of the functions then forms the basis for further description of the processes relative by Event-driven Process Chains, enabling the determination of the exact structure of the activities within the framework of the FM introduction. Finally, the implementation of the models into the overall assistance system is to be accomplished, followed by a number of pilot tests.

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Bernhold, T., Büttner, B., May, M., Riemenschneider, F. (2007), Rechnergestützte Implementierung eines Facility Management - Ergebnisse aus dem aktuellen BMBFForschungsprojekt "FM-ASSIST", in: Gellenbeck, K., Eiling, H. and Riemenschnieder, F. (Publ.) Münsteraner Schriften zum Facility Management, Vol. 1. Münster, INFA-ISFM e.V., pp. 36-50. Bolay, S. (2006), Gebäudemanagement in Kommunen: Bedeutung für Energiemanagement und erneuerbare Energien, Arbeitspapier 2. SKE²P, Strategische Kommunale Energiepolitik zur Nutzung Erneuerbarer Energieträger, KWI Potsdam. Brockhoff, P., Zimmermann, M. (2005), Public Real Estate Management, Schulte K.-W. (Publ.): Immobilienökonomie, Betriebswirtschaftliche Grundlagen, Vol. I, 3rd edition, München: Oldenburg, pp. 895-916. Chotipanich, S. (2004), Positioning facility management, Facilities, Vol. 22, No. 13/14, pp. 364-372. Connors, P. (2003), Innovation Process and Innovativeness in Facility Management Organizations - Comparative Case Study. Cooperation Research Centre (CRC) for construction innovation (2006), FM as a business enabler, Solutions for managing the built environment, Executive summary, Brisbane. DIN EN 15221 (2005), Facility Management - Begriffe, Deutsche Fassung prEN 15221:2005, Entwurf, Berlin: Beuth. EC (2004), Business-related services: a key driver of European competitiveness. An enhanced economic analysis. Enterprise-Directorate General, Enterprise DG Working Paper, European Commission, http://ec.europa.eu/enterprise/services/business_ related_services/documents_brs/17_12_2004_d1_503_dt_brs_en.pdf, 09.07.2007. Ecke, C. (2004) Strategisches Immobilienmanagement der Öffentlichen Hand, Empirische Untersuchungen und Handlungsempfehlungen, Köln: SDK Systemdruck. Gaenßmantel, J., Geburtig, G., Schau, A. (2005), Sanierung und Facility Management. Nachhaltiges Bauinstandhalten und Bauinstandsetzen, Wiesbaden: Teubner. Hink, R., Plantzer, R., Moedlhammer, H. (2004), Schriftenreiche Rechts- und Finanzierungspraxis der Gemeinden (RFG), Wien: MANZ’sche Verlags- und Universitätsbuchhandlung GmbH. Jackson, R. W., Neidell, L. A. and Lunsford, D. A. (1995), Investigation of the Differences in Goods and Services as Perceived by Organizational Buyers, Industrial Marketing Management, Vol. 24, pp. 99-108. Keller, G., Nüttgens, M., Scheer, A.-W. (1992), Semantische Prozessmodellierung auf der Grundlage "Ereignisgesteuerter Prozessketten (EPK)", in: Scheer, A.-W. (Publ.), Veröffentlichungen des Instituts für Wirtschaftsinformatik (IWi), Universität des Saarlandes, No. 89, Saarbrücken. KGSt-Report (2003), KGSt- Kommunale Gemeinschaftsstelle für Verwaltungsmanagement, Erfolgsfaktoren kommunaler Gebäudewirtschaft, No. 6, Köln. KGSt-Report (2004), Kommunale Gebäudeflächen optimal nutzen, No. 10, Köln. Kosilek, E. (2004), Elektronische Beschaffung in Kommunen, in: Reding, K., Müller, W. (Publ.), Forum Finanzwissenschaft und Public Management, Vol. 1, Lohmar, atst. Diss. Universität Dresden: EUL Verlag. May, M. (ed.) (2006), IT im Facility Management erfolgreich einsetzen – Das CAFM-Handbuch, Berlin u.a.: Springer. McLennan, P. (2004), Service operations management as a conceptual framework for facility management, Facilities, Vol. 22, No. 13/14, pp. 344-348. Mudrak, T., van Wagenberg, A. F., Wubben, E. (2004), Assessing the innovative ability of FM teams: a review, Facilities, Vol. 22, No. 11/12, pp. 290-295. 65

Nutt, B. (1999), Linking FM practice and research, Facilities, Vol. 17, No. 12, pp. 11-17. Ostdeutscher Sparkassen- und Giroverband (2002), Gebäude- und Liegenschaftsmanagement in Kommunen – Leitfaden, Berlin. Poell, E. (2007), Öffentliche Immobilien: Managen, nicht verwalten!, Forum Wohneigentum, Zeitschrift für Wohneigentum in der Stadtentwicklung und Immobilienwirtschaft, No. 2, Berlin: vhw-Verlag, pp. 59-66. Prahalad, C. K., Hamel, G. (1990), The Core Competence of the Corporation, Harvard Business Review, May – June, pp. 79-91. Preuss N., Schoene, L. B. (2006), Real Estate und Facility Management, 2nd edition, Berlin: Springer. Projektmanagement-Handbuch (2000), PM-Hadbuch.com, Kostenloser Leitfaden für Projektmanager, http://www.pm-handbuch.com/grundlagen.htm#projektmanagement, 07.30.2007, 4:43pm. Quinn, J. B., Hilmer, F. G. (1995), Strategic, The McKinsey Quarterly, No. 1, pp. 48-70. Sasse, E., Zehrer, H. (2004) Handbuch Facility Management, Einführung/ Grundlagen/ Leitbegriffe, Landsberg: ecomed. Smith, S. (2003) Defining facilities, in: Best, R., Langston, C. and de Valence, G. (Publ.) Workplace Strategies and Facilities Management, Oxford, Amsterdam.: ButterworthHeinemann, pp. 11-29. Tay, L., Ooi, J. T. L. (2001), Facilities Management: a "Jack of all trades?", Facilities, Vol. 19, No. 10, pp. 357-362. Van Wagenberg, A. F. (2003), The Netherlands: Facility Management in Dutch Municipalities, Nordic Journal of Surveying and Real Estate Research - Special Series, Vol. 1, pp. 89-97.

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Reference Processes and Internal Control Systems within Facility Management Alexander Redlein, Barbara Giller IFM / Vienna University of Technology, Austria, ABSTRACT The directive 2006/43/EC of the European Parliament and the Council, (Eighth Council Directive) states that for public-interest entities stricter requirements should apply for a statutory audit of their annual or consolidated accounts. An effective internal control system (ICS) helps to minimise risks and enhances the quality of financial reporting. A standard framework for an ICS is the COSO methodology. COSO (Committee of Sponsoring Organisations of the Treadway Commission) requests a documented internal control system for principles, procedures and processes. This method proposes taking a risk based approach to internal controls: Companies should use their financial statements as a starting point and identify potential risks for those business activities, processes and events that can significantly affect their financial statements. In addition, suitable measures for risk control should be put in place. An IFMA study showed that 10-18% of companies’ expenditure refers to real estate; 25-50% of the assets of companies are attributable to real estate. Processes in Facility Management can therefore materially affect the financial statements of the company. Therefore they are in scope for the ICS of a company. This paper outlines COSO and SOX 404 as well as its relevance for FM processes. In a next step, the requirements of an ICS reference processes in Facility Management are defined and existing processes are enlarged by risks and control activities in order to provide guidance for the introduction of an ICS in the area of FM. In the paper the theoretical concept, the outcome of the studies and examples of enlarged reference processes will be presented. KEYWORDS Facility Management, internal control system, Reference Processes, Risk and Controls within FM

INTRODUCTION The directive 2006/43/EC of the European Parliament and the Council, dated 17th of May 2006, repealing Council Directive 84/253/EEC (Eighth Council Directive), dated 10th of April 1984, states that for public interest entities stricter requirements should apply for the statutory audit of their annual or consolidated accounts. An effective internal control system (ICS) helps to minimise risks and enhances the quality of financial reporting. This directive has to be transferred into national legislation within the year 2008. The detailed national interpretation cannot be foreseen for the respective European Union member countries. But it is for sure, that more companies will introduce an ICS in the next future. This paper examines the challenges and difficulties involved in the implementation of an ICS with a view to FM. 67

The hypothesis is set up that the Eighth Council Directive leads to the obligation that more companies have to implement an ICS system. As FM expenditures are material also FM will be affected by these ICS systems. An additional hypothesis is set up that the COSO framework and some steps based on SOX 404 together with business process reengineering can be used to set up FM processes meeting the ICS requirements. In addition, reference models can be set up or existing process models can be extended in order to fulfil the ICS requirements. Afterwards these process models can be used as a basis for the implementation of processes meeting the ICS requirements. To prove these hypotheses the following steps are carried out: • Analysis of frameworks and methodology to implement an ICS • Analysis if FM processes are in the focus of an ICS and if they are definition of the requirements for FM processes • Define enlarged standard reference processes as a basis for the ICS implementation • Proposal of further possible improvements Framework and Methodology for an ICS Implementation In literature, only few frameworks for an ICS can be found: • ISO 9000: rather general, • ITIL: Concentration on IT, • COSO (Committee of Sponsoring Organisations of the Treadway Commission): A standard methodology covering the whole company The COSO methodology developed together with PriceWaterhouseCoopers, provides the most general framework. It provides guidelines for the company as a whole. But even the COSO methodology provides no guideline for the implementation. According to (Giller 2006) a guideline can be found in the ‚Public Company Accounting Reform and Investor Protection Act of 2002’ (comp. SOX 2002), better known as the ‘Sarbanes Oxley Act’ (SOX). The Act requires management to identify and assess internal processes and controls in accordance with strict rules and principles. (comp. PCAOB 2004, 5). The main aim of these regulations (PCAOB 2004) is to verify that the basis data which is necessary for the preparation of the financial statements is processed completely and accurately. In this way the internal processes and controls become more transparent and the risk of material misstatement of the financial statements is reduced. This requirement is also core requirement of the COSO framework. Of course the law requires more actions to be taken than the COSO framework but several steps can be used for the implementation of an ICS based on the COSO framework. The figure below shows the key steps which are necessary for the implementation of the Sarbanes Oxley Act. Details on the scoping and the validation procedures can be found in the (PCAOB 2004) Auditing Standard Nr.2. The following description of the key steps focuses on the steps which are also relevant for the implementation of an ICS (marked red in the figure). The relevant steps are: Documentation of significant processes: The companies should document the significant processes and accounting transactions relating to critical and material financial statements items (e.g. revenues, payroll accruals, procurement and expenses, expenditures for facilities etc.) (PricewaterhouseCoopers 2003, 2). The process documentation must enable management and third parties the understanding of the transaction flow and specify how these activities are initiated, transferred, recorded. 68

Sarbanes Oxley Key Steps

Validating

Evaluating

Understanding

Scoping

Assess the risk of material misstatement (inherent / fraud risk)

Determine financial Identify significant statement assertions and accounts and disclosures scope significant locations

Document significant processes

Assess the design efficiency of the key controls

Identify controls within the processes (internal control system)

Define test plans for the key controls and test the operating efficiency

Identify financial statement critical processes

Define relevant key controls & document the design of controls

Evaluation of control defficiencies

Management Conclusion on overall effectiveness

Figure 1: The Sarbanes Oxley Act Key Steps (Based on PricewaterhouseCoopers 2003, 2).

Identification of controls within the processes (ICS Internal controls system): After the documentation of the transaction flow, management has to define possible risks within the processes leading to a potential financial statements misstatement. These risks must be covered by internal controls. These controls are able to detect or prevent errors or fraud that could result in material misstatement in the accounts and disclosures (PCAOB 2004, 26). These controls must be identified and documented and if the actual process lacks important controls then this should be defined as a control gap. Definition and documentation of relevant key controls: The identified controls must be assessed with respect to their importance for the financial statements. Management has to classify the controls into identified controls and key controls: The failure of an identified control has no significant impact on the financial statement whereas a key control can be defined as a control which will cause a material misstatement when it is not operating effectively. This step of identifying the key controls is one of the most important actions. Management thereby determines whether the controls (procedures, processes, policies, and systems) will, if operating as intended, provide reasonable assurance that [...] all significant accounts and disclosures give a true and fair view (PricewaterhouseCoopers 2003, 48). Relevance for FM processes In the first step described above the material accounts and the processes relating to critical and material financial statements items are defined. In practise all accounts that have volumes of more than 5% of the turnover of the company are regarded as material. IFMA shows in a study that between 10-18% of expenditure is related to real estate, 25-50% of the assets of companies are real estate. Similar figures are provided by Schulte in a study in Germany. 69

Processes in Facility Management can therefore materially effect the financial statements of the company. Therefore they are in the scope of the ICS of a company. This conclusion proves the first hypothesis. According to SOX the processes have to be documented in the first step. This key step is a very time consuming and cost intensive part of the implementation procedure. Therefore it is reasonable to harness already existing process documentations like BPR outputs and standard reference processes.2 Business Process Reengineering In the nineties, most of these firms were strongly influenced by the hype of Business Process Reengineering (BRP). These companies could use the output of their BPR projects by enlarging their existing processes by the necessary ICS criteria in order to meet the requirements. If we compare the main steps of business process reengineering with the steps relevant for the introduction of an ICS, the following steps are similar (comp. Servatius, 1994, page 50): • Identification of the core processes: Under this step the core processes which were important for the company success had to be defined. • Selection of the core processes that have the highest need for • Analysis to understand processes • Collect ideas for redesign and optimisation • Concept development: Based on the gathered knowledge and ideas a concept for the optimisation of the core processes was defined. The analysis of the steps shows, that the steps of a BPR project equals the step documentation of processes of the SOX methodology. As a result, many European companies have already defined their internal processes which could definitely be used as an adequate basis for ICS. Based on this result the hypothesis that the results of business process reengineering project can be used as a basis to set up FM processes meeting the ICS requirements can be proved. Based on the over 25 case studies within large European companies it can be stated that the available processes documentation is not able to meet the other ICS requirements as they do not fulfil all necessary criteria like identification of risks and internal controls. This ICS component can only be considered by enlarging the existing process documentation. As a guideline for the enlargement of the exiting documentation reference processes could be used (comp. Giller 2006). In some cases no documentation was found at all. For theses companies reference processes also can be used as a guideline. Reference Processes An example of reference processes are the reference workflows defined by A.W.Scheer covering the primary processes of a company and Fleischmann (Fleischmann 2006) covering several FM processes. But the existing reference models do not fulfil the necessary criteria like identification of risks and internal controls. But according to (Giller 2006) the exiting process models can be enlarged to fulfil these requirements. To enlarged the models the following steps have to be performed: 2

Scheer has standardised and documented all significant internal processes which can be easily adapted to companies in various industries. Fleischmann started documenting FM processes.

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• The key steps of ICS which are related to the understanding and the evaluation of significant processes are analysed. The outputs of this analysis are requirements for the process, risk and control definition and documentation. • Existing reference models (e.g. Scheer and Fleischmann) are examined in order to evaluate how they can be enlarged that they can fulfil the requirements stated. • Based on the case studies the corresponding risks, control gaps and missing process steps are defined. In this way new enlarged reference models are specified. For the documentation of the steps and the gaps the process modelling methodology like the ARIS methodology can be used. The following chapters describe this analysis in detail. Purchase & Payable Process As example the “Purchase & Payables” Process is used. The respective Scheer standard process will be described, the gap (e.g. required internal controls) will be defined. In the next step the missing steps will be defined. This will lead to a new reference process which is capable of covering the ICS requirements. The following figure shows the “Purchase & Payables” business transaction chain. This process is supported by various ERP systems.

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Figure 2: “Purchase & Payables” Process flow (Source: Scheer, 1994)

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In order to meet the ICS requirements the standard process documented above has to be analyzed under a risk perspective: It is important to identify possible risks of a material financial misstatement which are involved in this process flow. In order to define the necessary control activities (key controls) the individual process activities are linked to certain risks. Based on twenty case studies in companies in various industries (pharmaceutical, telecommunication, engineering etc.) it was possible to identify process risks and internal controls which are typical. These risks and controls were abstracted and standardized. The result is illustrated on the example of master data management:

Figure 3: “Purchase & Payables” Master Data Process flow (Source: Scheer, 1994)

Master data management: The purchase department is responsible for the correct and complete handling of mandatory data like supplier and product master data. As this data is one of the most important data within a company they have a heavy impact on the financial statements. In order to enlarge the standard process by internal controls, the related key risks have to be identified. These risk definitions can then be mapped to control activities which aim at covering the misstatement risks. The following table documents process steps and their underlying risks together with the risk addressing control activities. Table 1: Risks and internal controls for master data management (Source: Own table) Process step Create/Change/Delete supplier master data Create/Change/Delete product master data

Create/Change/Delete master data supplier Create/Change/Delete product master data Create/Change/Delete conditions

Create/Change/Delete product master data Create/Change/Delete conditions

Risk of material misstatement There is unlimited system access to the supplier and product master data which might lead to unauthorized master data changes (e.g. bank account This makes it possible to transfer cash to specific account different to the supplier’s account). (fraud risk) Incorrect or incomplete changes to customer and product master (names, addresses, bank account) data lead to fictive suppliers and invoicing mistakes. Conditions are not in accordance with the actual conditions leading to an expenditures misstatement. Price changes which are entered in the product master data exceed the standard price for the respective product.

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Control activity Control 1: Access to supplier master data and product master data is officially defined and authorized (signed off) by the respective department head (e.g. purchase department responsibility). Control 2: Changes to the ERP role settings are only executed if the access was authorized by the entitled department head. Control 3: Changes of user accounts are updated regularly. User accounts of former employees are inactivated on a timely basis. Control 4: Management examines the report evidencing changes to master data (ERP report) and ensures the changes were valid against the documents received from purchase department (no reconciliation mismatches) for supplier / for product. Control 5: Procedures exist for adding and changing Condition Types in the ERP system. Control 6: Conditions settings are reconciled with supporting documentation (contracts, invoices, rebate authorization, credit notes). Control 7: Procedures are established for management review of manual price over-rides. A report has to be defined in the ERP for manual price over-rides (for example overrides of more than >20%).

The following flow chart shows how the control activities can enlarge the reference processes and thereby they lead to an ICS compatible process. As Scheer’s process lacks the authorization concept the standard process has to be extended by this concept (see part 1). The controls documented in the table above are integrated in the standard process flow (see part 2). Control 5 is covered by establishing the process `master data management´.

Part 1: Authorization concept Purchase department

Authorization concept (User Access) Reference no.

I .

Purchase department

Definition of roles and authorization concept for ERP access by purchase department (Control Activity 1) Reference no.

1.

User administration

Create / Change / Delete user access in ERP only if the roles are approved by purchase department (Control Activity 2) Reference no.

2.

User administration

Create / Change / Delete user access in ERP on a timely basis (Control activity 3) Reference no.

3.

Figure 3: Process flow of the Authorization concept. (Source: Own figure)

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Part 2: Master data management

Figure 4: Master data management process – version covering SOX requirements. (Souce: Own figure)3

The figures above show the new reference process model. The combination of these two processes (authorization concept & master data management) fulfills all important ICS requirements. These new processes provide a basis for companies’ internal processes and internal control management and may be used as a reference for the ICS implementation. CONCLUSION The Eighth Council Directive states that for companies of public interests stricter requirements should apply for the statutory audit of their annual or consolidated accounts. In addition, it demands an effective internal control system (ICS) for these entities. An ICS takes into account all significant processes and accounting transactions relating to critical and 3

Reference number 2, 3 and 6 are the original process steps of Scheer’s reference model.

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material financial statements items. All accounts that show an amount of more than 5% of the turnover of the company are classified as material. Studies and literature show that between 10-18% of expenditure is related to real estate, 25-50% of the assets of companies are real estate. Processes in Facility Management can therefore materially effect the financial statements of the company. Therefore they are in the scope of the ICS of a company. To set up ICS compliant processes some steps of SOX 404 can be used. The relevant steps are documentation of significant processes, identification of controls within the processes. The first step causes a lot of work. The paper proves that existing results of a BPR project can be used as a starting point. This reduces the workload dramatically. But also reference models can support the implementation of an ICS, as they provide best practice that can be adapted to the requirements of the company. But reference processes like Scheer and Fleischmann do not cover all requirements of ICS. A solution is to enlarge these existing processes. As shown in the paper this is possible based on a large number of case studies. The example given is the “Purchase & Payable” process. In the next step, this new reference process will be validated in further case studies. In future, the hypothesis will be tested on further critical process (e.g. maintenance, asset evaluation). These reference models will also be enlarged by adequate risks and internal controls. REFERENCES Giller, B. and Redlein, A. (2005). Optimized SOX implementation based on standard references processes; Emerging Issues in Accounting, Business and Technologies 2005, Niagara University, Niagara Falls; 08.2005; in: "Conference Proceedings - Emerging Issues in Accounting, Business and Technologies", (2005), pp. 56. Hammer, M. and Champy, J. (1993). Reengineering the Corporation- A Manifesto for Business Revolution. 1993, New York, USA. PCAOB 2004: Public Company Accounting Oversight Board (2004): PCAOB Release 2004, March 9. Washington. PricewaterhouseCoopers (2003): Management’s responsibility for Assessing the Effectiveness of Internal Control over Financial Reporting under Section 404 of the Sarbanes Oxley Act. New York. PricewaterhouseCoopers (2004): Sarbanes Oxley Act – Section 404, Practical Guidance for Management. New York. Scheer, A. W. (1994): Wirtschaftsinformatik – Referenzmodelle für industrielle Geschäftsprozesse, Berlin, Heidelberg, New York, Springer Verlag Servatius, H.-G. (1994). Reengineering-Programme umsetzen, Stuttgart, Schäffer-Poeschel Verlag SOX 2002: Public Company Accounting Reform and Investor Protection Act of 2002, Sarbanes Oxley Act (2002): 107th Congress of the United States of America. Washington.

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EuroFM Monograph

Facilities Management Processes

Section Three FM PROCESSES: APPLICATIONS Process analysis for hospital FM Kunibert Lennerts, Jochen Abel, Uwe Pfrunder and Vishal Sharma

Process improvement in FM: the SPICE approach Dilanthi Amaratunga, Richard Haigh, David Baldry and Marjan Sarshar

Facilities Management Processes In Higher Education Institution Md Yusof Hamid, David Baldry and Keith Alexander

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Process Analysis for Hospital Facility Management Kunibert Lennerts Jochen Abel University of Karlsruhe, Germany Uwe Pfründer Vishal Sharma University of Alberta, Edmonton, Canada

Abstract Healthcare systems are very costly and the inpatient treatment in hospitals is a major part of these costs. The question is, how can greater efficiency be effected without influencing the core business of a hospital – the cure of patients. Through improving the process flow of facility management (FM) processes, savings within these processes and less disturbance of primary processes should be accomplished. In order to help introducing professional FM methods in hospitals the OPIK research project has designed standard processes for typical FM services. Processes have been field tested and evaluated in terms of interference with the core process as well as cost and quality factors have been determined. The research has shown that standard processes can be defined and the performance can be improved through restructuring the process flow by having detailed knowledge of the process characteristics. The analysis of data through linear regression shows a significant correlation between product costs and possible clearing units. These results encourage to look for reasonable methods of cost allocation. In terms of statistical significance the good results can be up valued through increasing the amount of data by applying the method in other hospitals. Future activities should concentrate on this room for improvement. For the first time a reasonable basis for comparing FM processes in hospitals has been defined. Introduction The following introduction and the description of the research projects structure and methodology are comparable to a previous publication by Lennerts et al. (2003). What makes a hospital a special facility? Firstly, it is a 24 hours a day, 7 days a week facility and furthermore, a mistake in a hospital can cost the life of a human being. These characteristics represent unique operating conditions and a bottom-line that involves much greater stakes than the profit-only vision of most business ventures. Hospitals also must constantly update their equipment to meet state-of-the-art standards and if possible to go beyond this service level and offer cutting-edge technologies at exorbitant prices. All these costs are reflected in the price of health care in Germany where the increasing costs of health care reduce the net income of citizens, since health insurance contributions are deducted from gross income. Currently the rate of contribution is approximately 14 per cent 78

(BMG, 2002) of gross income. What possibilities does the field of facility management (FM) offer to help in solving these problems? It is evident that hospitals are moving in the direction of becoming health production companies. Already in 1979, Anderson (1979) poses the question “Hospital production – can costs be contained?” and mentions “productive inefficiencies and underutilized resources”. Others see the hospital as a “multi-product firm” (Lave and Lave, 1970; Cowing and Holtmann, 1983). The consequence of this development is shown in Figure 1.

Figure 1: Distribution of inpatient admissions and length of stay A greater number of patients are being treated every year while the number of beds in hospital facilities are steadily decreasing. This directly leads to a significant decrease in the length of stay of patients. These tendencies demand greater efficiency and improved hospital treatment and should result in a parallel rise in the level of professional performance of hospital facilities management. How can greater efficiency be effected? One third of hospital costs are not related to core processes. Based upon data of the German hopital society (DKG, 2000) this corresponds to 14 billion annually. OPIK research project To answer the questions mentioned above, the OPIK project was launched in 2001. The University of Karlsruhe in cooperation with the “Fachvereinigung Krankenhaustechnik” (FKT), or Professional Association of Hospital Engineering, put together a top-rate selection of hospitals and FM service providers to participate as contributors to overall project success. The project is completely private funded. Funds are made available by the paticipating service providers. The objective of the OPIK research project is to analyse the business processes of the collaborators with a focus on the interaction between primary (medical) and secondary (facility management) business processes. The most fundamental underlying principle of the OPIK partnership was an agreement that a real potential for savings cannot be generated just by focusing on a single process or even a 79

solitary process step. The partners embarked on a strategy emphasising a more holistic approach and a comprehensive framework for analysing business processes. This unique research project and its varied partners make the extensive analysis of processes in hospitals and the generation of a detailed process matrix possible. These, in turn, will enable farreaching standards for the performance of FM services to be set. Effective benchmarking, an accumulation of synergy effects, and organisational optimisation will be enabled with the help of this precedent-setting standard. In principle, the research project will create a basis for the introduction of efficient, holistic FM structures and processes for German hospitals. A conscious decision was made to involve service providers and hospitals in the co-operative framework of the project in order to ensure a practical (real world) orientation and satisfy the needs of industry and the clinical complexes. Care was taken to select service providers from all the various areas dealing with the operation of clinics. In reference to the selection of the clinic partners, attention was paid to assure a broad and diversified cross-section of the clinical landscape in Germany. Different carriers and various hospital sizes can be found in the sample group chosen by judgement sampling. Thereby, the results of the project have validity in all types of hospitals. Methodology The analysis of the business processes was carried out in seven steps. Scientific research preliminary to the visualisation of processes required necessary information about general conditions, visualisation methods and specific process knowledge to be gathered. Knowledge sources included university libraries, databases as well as the internet and data were collected and structured in the form of mind maps. The advantage that mind maps represented was the dynamic growth of knowledge generation and structural outlines that could be easily developed to support research activities. The delineation of each process took place in expert round tables. The partners to each round table named their experts. This knowledge pool was used to create process models capable of reflecting real world situations and illuminating the features of emergent standard processes. The standard processes that were developed were evaluated in case studies. In selected hospitals, the processes were tested in regard to their ability to adequately reflect and respond to actual conditions. The standard processes were evaluated and modified on site to optimise their applicability. Subsequent expert round tables focused on the process information flow and other process factors. In order to ensure acrossthe-board results, the interfaces and factors were defined by using standard questions on every process-step. The information flow for each process-step was investigated to determine what kind of information was being transferred, and who delivered and received this information. Processes were categorised according to cost and quality factors. The cost factors were identified by asking the experts, what is the cost generating factor and which value can be used as a reference. The quality factors were determined by asking the experts, which quantitative result reflects divergence from the expected quality? The most laborintensive work package included extensive data collection in all participating hospitals. A matrix of all existing data points as result of the process definition was generated as preparation for finalising data entry forms. Data that were rated with high impact for the individual process was selected in order to produce clear and manageable data collection forms. The forms were then implemented to document and accompany the execution of each individual process. There were two groups of processes. For example the “energy management” and “construction on existing building sites” processes were accompanied by a form to be filled out at the end of each day, detailing the tasks and process steps carried out. In contrast, processes like, “maintenance of medical equipment” and “waste management” 80

were each assigned a representative form to be filled out while the service was being performed in order to provide measurement assessments. The paper-based data collection forms were entered into a pre-programmed database. The database was also used for data preparation and the final analysis. Linear regression was used to analyse data in terms of correlation with cost drivers. Process flow data were collected and compared in order to identify different practices between hospitals. Results Detailing all the results is not within the scope of this paper. The cumulative results of the project are instead the focus. Therefore, a comprehensive insight into two selected processes will follow. Maintenance of medical equipment According to Williams (2000) “any activity which does not directly contribute to income should be considered as ‘non core’”. Although the medical equipment is being used in the core process, the maintenance of this equipment is not directly related to the cure of a patient and therefore a “non-core” process. A speciality of this process is the information flow between core and non-core process and the differing responsibilities for single parts of the overall process. Even if the presented results are hospital specific, they are representative for similar circumstances in other FM processes. Scope of the process The process “maintenance of medical equipment” serves the flawless provision of necessary medical equipment. The process is to be used for all technical equipment falling under the “Medizinproduktegesetz” (Medical Devices Act, MPG, 2003). The MPG regulates the trade with medical devices in order to ensure security, suitability and performance so that patient, user and others are not endangered (MPG, 2003). Definition of the customer Especially for FM processes an accurate check-up on who is and may be customer of the process is necessary. By definition the customer is an “organisation or person that receives a product” (EN ISO 9000, 2000). For the hospital the customer is the patient and the product is healthcare. Therefore, sometimes the patient is a direct customer of FM processes and sometimes only indirect. Especially when analysing processes very detailed, many subprocesses with different customers might be revealed. Different persons can be customer of the “life cycle process of medical equipment”. Indirect customer of this process is the patient as the equipment is being used for the support of his cure or convalescence. The patient does not actively affect the process, he is only beneficiary of the specific device. Direct customer is the medical personnel – doctors and nurses – that need the medical devices for the support of their own processes.

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Goals of the process Goal from the customers' viewpoint. The patient as being indirect customer of the process needs the guaranty of the perfect support of the medical process through the necessary equipment. The medical personnel needs the fully functional medical equipment as needed to support the healing process. Goals from the viewpoint of the organisation. By implementing this process it is ensured that the medical equipment is maintained as required by the medical devices act. Therefore liability risks can be minimised. Goals from the workers viewpoint The process is an assistance for the worker to easily maintain the equipment in the required manner. Process flow The life cycle process of medical devices has six distinct sub-processes. The overall process flow can be seen in Figure 2.

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Figure 2: Life cycle process The loops within the process are represented by on page references, e.g. the return into regular operation after the repair process through shapes 11 and 4. After a primary phase of procurement and initial operation (Start Up), the main cycle begins. Out of the regular operation the medical device passes through the maintenance and inspection sub-process. Either out of the maintenance or the operation process the repair process can be activated. The repair process is also the point of decision, whether the equipment can return to regular operation or not. The speciality of this process compared to other FM processes is that the responsibilities are varying between the different sub-processes. The initial part of the process is often lead-managed by the purchasing department. The main cycle is segmented into the operation phase where the customer is responsible and the maintenance and repair phases where the medical department is responsible. Owing to the fact of alternating responsibilities, it was necessary to concentrate on the proper analysis of the information flow. As already mentioned the information flow was investigated in expert round tables. In order to create a homogeneous picture of the information flow, for each process step within the six sub-processes the same three questions have been asked. 1. What kind of information is transmitted? 2. Who delivers this information? 3. Who receives which information? This approach created a comprehensive picture of the information flow. Information being exchanged between the core and non-core processes then was visually emphasised. Thus the important points in terms of information exchange can be seen at a glance. Using this visualisation method has also turned out to be very helpful in finding optimisation potential within the process flow. Through modifying the process model by shifting process steps or combining multiple queries into one step the information flow can be compacted without affecting the process quality or elongation of the process duration. This means that unnecessary communication is avoided and thereby interference with the core process is reduced. Analysis The data entry form created for the collection of real life data on the process also reflects the importance of the information flow. For each process step the labour time was recorded separately for work-time, time for information exchange and travel-time. In Table I, an overview of the analysed data is given.

Table I: Process characteristics regarding labour time 83

The differentiation shows whether the process step is more characterised by its information-, work- or travel-time. Time for information exchange is more often spent on the process-steps “damage examination” and “repair”. The accumulation of information flow activities must be seen as very critical during the repair process-step. The data showed that over 10 per cent of all process cycles caused information exchange activities during repair. Information exchange during the repair itself means an uncontrolled interruption of the repair process and a disturbance of the core process. Therefore these activities should be shifted towards “damage examination”, “cause analysis” or “restarting operation”. The number of times each single process step has been activated in the sub-process “repair” can be seen in Figure 3.

Figure 3: Distribution of process activities This method has turned out to be very helpful in comparing the performance in different hospitals and directly give suggestions to improve the process flow. Besides the intensive analysis of the process flow and information exchange the determining factors characterising the process were defined. Most interesting is the definition of a correct basis to compare different hospitals. In the Figures 4-5, Figures 6-7, the maintenance costs for medical equipment is evaluated according to different comparison values. The maintenance costs have been anonymised by using arbitrary units due to data protection reasons. The values used for comparison are the number of operating rooms (ORs), surface area, the replacement value and the number of beds. In contrast to the other analysed processes the costs do not correlate to the surface area. The strongest correlation can be found between the maintenance costs and the number of beds.

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Figure 4: Maintenance costs to number of ORs

Figure 5: Maintenance costs to surface area

Figure 6: Maintenance cost to replacement value

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Figure 7: Maintenance cost to number of beds Maintenance of technical equipment The life cycle process and process flow for the maintenance of technical equipment is very similar to the maintenance of medical equipment. Even though technical equipment is most often installed in areas that are easily accessible for the technical personnel and some of these equipments are not even operated by the customer, the information flow between FM services personnel and the customer plays an important role. Therefore the same recommendation can be given that interruptions of the primary process can be and should be avoided through improvement of planning. Process data The data collection on the process of technical maintenance covered a time period of four weeks. In this four weeks a total number of 976 work orders were registered and entered into the database. As the forms have been filled out by staff members of the clinics, the results give an overview of in-house personnel activities regarding maintenance of technical equipment. The activities were differentiated into planned and unplanned maintenance. The proportions of unplanned and planned activities are given in Figure 8.

Figure 8: Distribution of planned and unplanned maintenance 86

Regardless of whether the number of work orders or the labour time is compared, the proportion stays almost the same. The distribution shows that in-house personnel is mainly performing repair jobs. One reason for this is that planned maintenance is more likely outsourced. The two different types of maintenance have been further investigated by asking what kind of technical equipment is maintained. Regarding the different types of equipment it is definitely necessary to differentiate into planned and unplanned activities. Unplanned activities are not only complicating the day-to-day business of facility management staff, but also bothering the customer and are therefore the main cause for dissatisfaction. Figure 9 shows the number of times repair work orders have been registered and how much effort in terms of labour time was spent for different types of equipment. The main number of repair work orders deal with electrical equipment or the belonging installation. They are followed by the repair of all kinds of inventory like furniture and beds. Taking labour time into consideration it is noticeable that the time spent on repair of inventory has a smaller proportion (6 per cent) compared to the number of work orders (9 per cent). This comparison shows that these work orders cause more disturbance on the customer side than on the side of the FM organisation. This difference is even bigger regarding the planned maintenance activities.

Figure 9: Number of calls and labour time proportions for repair work orders Figure 10 shows the distribution of the number of work orders and the labour time spent on them for planned maintenance. Most interesting in this case are the maintenance of automatic doors and heating systems. Whereas every seventh (14 per cent) planned maintenance is performed on automatic doors, only 5 per cent of the total time spent on planned maintenance fall on them. On the other hand, 18 per cent of the labour time are connected to the planned maintenance of heating systems. This proportion corresponds to only 3 per cent of the work orders and is therefore summarised under the category, “other”.Considering these results and the fact that the process flow can be significantly improved through better planning, the improvement of planning should concentrate on heating systems and water supply in order to optimise the capacity planning of FM personnel and on electrical equipment and installations in order to reduce customer disturbance and improve capacity planning.

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Figure 10: Number of calls and labour time proportions for planned maintenance Conclusions The given sample shows that a step-by-step analysis of FM processes is very instrumental in optimising the process itself and its interactions with the core process. The often not considered labour time spent on information exchange is essential for the parallel flow of core and non-core processes. Through better planning the process flow can be significantly improved and interruption of the primary process can be minimised. This is only possible by knowing exactly what the process flow is. This standard process should be adopted by service providing personnel and the customer. The statistical analysis shows that it is reasonable to define a comparative figure that might be used as a clearing unit in an allocation system. Statistically it makes sense and is necessary to broaden the database in order to give a reasonable statement on the correlation between maintenance costs and replacement value. Unfortunately, data on the replacement value was not available in all participating hospitals. Both parameters are capable of being a reasonable reference. Commonly used for the comparison of maintenance costs is the replacement value. A shift towards the number of beds in order to compare hospitals would make comparisons easier. However, scientifically considered the replacement value is closer to being the cause for the maintenance costs. The first phase of the OPIK project proved how beneficial the introduction of professional FM methods in hospitals can be in terms of increased efficiency and a reduction in costs. Some hospitals have already learned from this knowledge and have implemented modern methods and technologies. These hospitals have already identified their processes, the focus on the customer and try to optimise their work flows. The vast potential savings in the field of FM can only be realised by taking a holistic approach towards FM processes. The biggest advantage to be gained is that secondary (service provision) processes are optimised as a result of these efforts and primary processes (medical treatment) can be left undisturbed, but can be enhanced by supporting processes that improve overall process flows. By introducing modern process-based accounting methods for tracking cost allocations, more potential savings can be generated without reducing the quality of the core processes. References Anderson, C.E. (1979), "Hospital production – can costs be contained?", American Economic Review, Vol. 69 No.2, pp.379-94. 88

BMG (2002), Statistische Taschenbuch – Gesundheit 2002, Federal Ministry of Health and Social Security, Bundesministerium für Gesundheit, Bonn, . DKG (2000), "Zahlen, Daten, Fakten", German Hospital Federation, Deutsche Krankenhaus Verlagsgesellschaft, Düsseldorf, . EN ISO 9000 (2000), "Quality management systems – fundamentals and vocabulary", European Committee for Standardization, Brussels, . Lave, J.R., Lave, L.B. (1970), "Hospital cost functions", American Economic Review, Vol. 60 No.3, pp.379-95. Lennerts, K., Abel, J., Pfründer, U., Sharma, V. (2003), "Reducing health-care costs through optimised facility management-related processes", Journal of Facilities Management, Vol. 2 No.2, pp.192-206. MPG (2003), "Gesetz über Medizinprodukte", Federal Law on Biomedical Equipment, BGBL 1994, 1963, Bundesanzeiger Verlag, Köln, . Williams, B. (2000), "Facilities economics", Building Economics Bureau, Kent, .

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Process improvement in Facilities Management The SPICE approach Prof Dilanthi Amaratunga Dr Richard Haigh David Baldry The University of Salford, Salford, UK Prof Marjan Sarshar Liverpool John Moores University, UK Abstract The paper describes a process to assess facilities management (FM) process capabilities: the structured process improvement for construction environments – facilities management (SPICE FM) approach. The SPICE FM framework is a method that FM organisations can use to monitor continuously and subsequently improve their performance. The SPICE FM framework is being tested in a series of case studies to ensure that its outputs are appropriate to the FM sector and of value in the real world. The paper documents the outcomes of a study undertaken at a facilities directorate of a healthcare NHS trust, in searching its applicability within the NHS. Further describes the study methodology and the key activities undertaken and reviews the key communication and management processes that are in place to support the implementation of the strategic FM objectives within the specific NHS facilities directorate. Keyword(s): Facilities management; Process management; Process efficiency; National Health Service.

Characteristics of a process Rather than discuss definitions of a process, it is easier to discuss its essential features. Ould (1995) lists these to be as follows: • • •

A process involves activity. People or equipment do things. A process also generally involves more than one person or piece of equipment. A process is about groups and concerns collaborative activity. A process has a goal. It intends to achieve something and produce some results.

These features have implications. • •

•

Since a process must be shared among groups, it needs to be defined. The definition and knowledge of the process must be passed to those who will perform it. Hence there is a requirement for process learning. The knowledge of the process should drive and align the behaviour and activities of those who perform it. The process leads to process results, which are the results of performing the process.

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This is shown in Figure 1.

Figure 1: Aspect of a process Process institutionalisation Initial preoccupation with tasks and functions that existed within organisations has given way to an emphasis on processes and their management (Then, 1996). In the later 1980s and early 1990s, links with the rest of the business functions were strengthened. A disciplined process resulted in ordered and consistent patterns of behaviour, whether by individuals or by groups of people following a common process. Therefore, the process defines how we act or react in certain situations, or it defines the activities needed to fulfil a certain task. We have a process for “going to work”, a process for “defining service standards”, and so on. In organisations, processes involve groups and teams of people, and to achieve a process discipline shared by the whole organisation, the process needs to be established or “institutionalised”. Without organisation-wide established processes, every individual would follow his or her own way of performing a task. Attempts to adhere to a common process are likely to be ad hoc or even chaotic. On the other hand, in organisations where common processes are institutionalised, staff perform the process painlessly, smoothly and in harmony with each other. The process itself becomes invisible or “transparent”, because it simply becomes the natural way of performing business activities.

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Process culture in facilities management (FM) Despite considerable achievements in recent years, and increasing awareness of the importance of FM process thinking is still very new (Hinks and McNay, 1999; Construct IT, 2001). Traditionally, FM has lacked specific management tools that meet its needs, instead borrowing many of its methods and tools from manufacturing industries. Most FM organisations focus on the service they provide. In such cultures people are naturally inclined to emphasise issues that are tangible, visible or measurable and are likely to resist process improvement activities that do not contribute to short-term tangible results (Hinks and McNay, 1999). Consequently, FM managers often view process related work as low priority. In contrast, process-focused organisations consider tangible service delivery results to be just one aspect of the business picture. How the service is delivered is equally important. The objective is that the process thinking should be accepted and used consistently. The process is seen as a disciplined way of conducting business. In contrast to functional definitions, a process perspective in FM is focusing on the tasks and activities that are taking place internal to the FM organisation. The emphasis is on how the work is done, rather than the functional responsibilities. The “SPICE FM” process maturity model Structured process improvement framework for construction environments – facilities management (SPICE FM) (Construct IT, 2001) is a process maturity model, a methodology for assessing the process capability of an FM organisation. The model is a step-wise approach to continuous improvement that aims to secure long-term competitive advantage and it acts as a method for measuring maturity of current business processes. It promotes a continuous process improvement culture within FM organisations based on many small, evolutionary steps and provides a system for initiating and implementing continuous improvement. SPICE FM is primarily concerned with management processes. The underlying philosophy is that if the management processes are well performed, they will have an impact on the performance of the core processes. SPICE FM does not prescribe how organisations should perform core processes, instead it focuses on creating a management infrastructure, which allows members of staff to perform their core processes successfully. The model divides these evolutionary steps into five maturity levels, which lay successive foundations for continuous process improvement. These maturity levels form a scale for measuring the capability of a FM organisation’s individual management processes, and its overall process capability. Each level of maturity consists of a set of key processes. When an organisation is successfully applying each key process, it can stabilise an important part of the service delivery process. The five levels provide guidelines on how to prioritise efforts at process improvement. Figure 2 illustrates the five stages of the SPICE FM framework. By following the steps in the model, an organisation can achieve effective and continuous improvement based on evolutionary steps. An organisation can only be at one level of the model at any one time. If an organisation is at level 1, but implements some of the key processes of level 3 or 4, it is still considered a level 1 organisation. This is because each level lays successive foundations for the next. The model shows that the organisation has little to gain by addressing issues at a higher level if all the key processes at the current level have not been implemented.

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Figure 2: SPICE FM Framework Stepwise improvements in organisational maturity Starting with ad hoc processes, the evolutionary five-stage model guides FM organisations towards developing process capability. With basic service management established at level 2 and knowledge management and best practice sharing at level 3, the model then introduces statistical controls and measurement in levels 4 and 5. Except for level 1, each level has a set of key processes, which an organisation should focus upon to improve its capability. Each process area comprises a set of key practices that indicate if the implementation of the process is effective, repeatable and lasting. Significantly, the SPICE FM approach is not prescriptive in terms of how activities are performed. Instead the model focuses on the broader issue of process management, which encourages and supports innovative approaches to solving day-to-day business problems, rather than constraining organisations to a particular way of working. Level 1 – initial

Level 1 is the basic entry level to the model. This level has no key processes and a FM provider at this level has little focus on process, and service performance may be poor. Good practices are local, and are not repeated or “institutionalised” across the organisation. Service requirements capture is not effective and service co-ordination undermines good practices. Level 1 FM organisations make commitments that staff or the supply chain cannot meet. This results in a series of crises. During a crisis, facilities managers typically abandon planned procedures; instead, individuals do whatever activities it takes to get the job done, with little regard for the effects on other people. Time, cost, quality and customer satisfaction may all suffer. At level 1, the effective delivery of the service depends entirely on having an exceptional manager and a competent team. When these managers leave, their stabilising influences leave with them. Consequently, the FM organisation is unable to consistently meet the requirements of the core business.

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Level 2 – service delivery management At this level, there is a degree of FM service performance predictability. At level 2, the FM provider has established effective processes to directly meet the requirements of the core business. An effective process is practised, documented, enforced, trained, evaluated and able to improve. A level 2 FM organisation has established policies and procedures for managing and delivering customer requirements. Service performance standards are established and service delivery is co-ordinated to minimise disruption to the core business. During service delivery, continuous service monitoring ensures that performance standards are met. Most of the efforts of the SPICE FM model have concentrated on defining and raising confidence at level 2 of the model. The seven key processes of the model at level 2 are described below (Construct IT, 2001): 1. Service requirement management. Managing customer requirements identifies organisational and user needs. Documented service level agreements and performance standards are developed and continuously reviewed to remain consistent with customer requirements. Service level agreements and performance standards are communicated to all staff involved in the delivery of the service. 2. Service planning. Service planning establishes realistic schedules of work based upon customer service level agreements and performance standards. Estimates (e.g. resources, maintenance schedules, budgets, purchasing) are prepared for all work to be performed (e.g. scheduled and reactive maintenance). 3. Service performance monitoring. Service performance monitoring ensures that services are delivered in a manner that is consistent with service level agreements and performance standards established with the customer. Feedback is gathered (e.g. from customers, staff) to monitor satisfaction levels. Performance measures (e.g. waiting times, error rates, processing times) are reviewed on a regular basis with staff and corrective action taken when service delivery deviates significantly from service plans. 4. Supplier and contractor management. Supplier and contractor management involves the selection of suitable suppliers and contractors. Service level agreements and performance standards are established and their performance is continuously reviewed. 5. Health and safety management. Health and safety management ensures that services are delivered in compliance with or exceeding all mandatory health and safety legislation. Health and safety risks are identified, assessed, and action taken to eliminate or minimise the probability of occurrence. 6. Risk management. Risk management involves identifying and evaluating risks so that action is taken to reduce the risk of an event occurring or to constrain the consequential effects should that event occur. Risks are identified in all areas of the business (e.g. to the environment, supply breakdown, property, financial performance). Staff are actively involved in identifying risks and taking steps to prevent risks becoming a reality. 7. Service co-ordination. Service co-ordination draws on the experience of other service teams, suppliers and customers to effectively meet customer requirements. Coordination between service teams, suppliers and customers ensures disruption to the core business is minimised. Representatives for co-ordination are appointed and methods for co-ordinating agreed. 94

Level 3 – knowledge management A level 3 FM organisation builds on the achievements of level 2. At this level, the FM organisation has well defined processes and has the capability to capture and share knowledge on an organisational scale. A well-defined process includes standard descriptions and models for performing the work, mechanisms to verify that the work has been done correctly (such as peer reviews) and completion criteria, that provide a good insight into progress. At level 3, an FM organisation creates teams, who capture and institutionalise best practices. These teams facilitate the creation of FM organisation wide process libraries. These libraries act as process standards representing the best practice. Employees in any part of the organisation can easily refer to these standard processes. SPICE FM research (Construct IT, 2001) has had little focus on level 3. It is anticipated that level 3 will be the subject of future research. Level 4 – quantitatively improved At this level, FM organisations have the capability to set quality goals for the service, the process, and supply chain relationships. The organisation will have a programme that measures productivity and quality for important service delivery process activities. This programme forms an objective basis for measuring the process, the degree of customer satisfaction, and the level of harmony across the supply chain. FM organisations gain control of service delivery by narrowing variations in process performance, so that they fall within acceptable boundaries. Meaningful variations can be distinguished from random variations. Similar to level 3, SPICE FM research has had little focus on level 4 and 5 issues. Most of the issues discussed here are subject to further research. Level 5 – continuously improving The expectation is that at level 5, the entire supply chain is focused on continuous process improvement. Level 5 organisations can identify weaknesses and strengthen processes before any problems emerge, and can do so in a collaborative manner. Data on the effectiveness of the processes are used to perform cost benefit analysis of any new technologies and proposed changes in the organisation’s processes. This increased level of understanding allows organisations to consider large-scale changes to their processes. Innovations that exploit best practice in business management are identified and adopted throughout the organisation. This level is also subject to further research. Process enablers How can managers ensure that they are performing the key processes adequately? To achieve this, the SPICE FM model has identified five process enablers, which are types of thinking or activities that are pre-conditions for implementing the process. These process enablers are based on principles established in the CMM (Paulk et al., 1994) and SPICE (Sarshar et al., 2000) that were developed for the software engineering and construction sectors respectively. Process enablers focus on the results that can be expected from a key process. This is a forward-looking approach, which indicates that an organisation has process capability before a process takes place. Process enablers provide details of the features a key process must possess to yield successful results. Ensuring that all the process enablers are in place 95

improves the performance and predictability of key processes. These process enablers, which are applicable across all the key processes, are outlined below (Construct IT, 2001): •

•

•

•

•

Commitment. This means ensuring that the organisation takes action to ensure the process is established and is lasting. Typically, process implementation involves establishing policies shared by the whole organisation. Some processes require sponsors or leaders in the organisation. Commitment ensures that leadership positions are created and filled, and that the relevant organisational policy statements exist. Ability. This describes the conditions that must exist before a process can be implemented competently. Ability normally means having adequate resources, and appropriate organisational structure, and training all in place. Verification. A verification procedure checks that activities are performed in compliance with the agreed process. Adopting verification as a process enabler in turn emphasises the need for independent verification by management and quality assurance. The focus is on external verification of processes. Evaluation. This involves basic internal process evaluation and reviews. These internal evaluations are used to help control and improve processes. During the early stages of maturity, this translates into efforts by the team to improve existing processes. The focus here is on the project team’s internal improvement efforts. Activities. This describes the activities, roles and procedures necessary to implement processes. They typically involve establishing plans and procedures, performing the work, tracking it, and taking corrective action as necessary.

Process improvement initiatives within NHS facilities The National Health Service (NHS) in the UK is now experiencing historic levels of growth with the largest programme of investment the country has ever seen. The NHS Plan (Department of Health, 2000a) not only acknowledges this, but also further seeks a change in culture to improve the way in which many of the basic services are provided to the patients. The recent report Shifting the Balance of Power announced the development of strategic health authorities and other major organisational change generally within the NHS (Department of Health, 2002a). In this climate of fast changes, the performance improvement agenda is a key part of modernisation of the health service. The Department of Health is seeking an improved system for collecting and presenting performance information in order to underpin this agenda (Department of Health, 2002b). The Department of Health states that the need to measure and publish performance is two fold (Department of Health, 2002b): 1. to enable continual service improvement, through the provision of the best possible management information; and 2. to demonstrate accountability to the public and parliament for the spending of public resources. Demands on the NHS can be potentially unlimited. Against this challenge, it is important to deliver high quality service as well as managing customer expectations. However, many NHS organisations (trusts) are finding it difficult to respond to the multi-dimensional measurement systems. Too much measurement has become an overhead for many trusts. Many trusts have limited capability and resources to launch improvement programmes based on these measurements. In order to meet some of these challenges, NHS facilities has devised various measurement systems and guidelines for trusts (NHS Estates, 2002a, b). The purpose of these 96

guidelines is to communicate customer requirements in a standard format to all trusts and provide some unified means of measuring compliance. Increasingly there is a view within NHS facilities that the facilities directorates within NHS trusts should set their own agenda and priorities. It is then the role of NHS facilities to: • • •

Decide on what not to measure. It is important to distinguish between critical and non-critical measures and continuously reduce the measurement overheads. Launch improvement initiatives based on what is measured. Monitor the real improvements that are taking place.

In this context, facilities directorates within NHS trusts could use SPICE FM framework, as a tool to identify their own organisational priorities. Based on the findings, they need to devise integrated management systems, which demonstrate improvements against their set of priorities. Within NHS estates there is also increasing desire to explore the use of new performance management systems which assist in executing strategies. The ultimate aim of NHS facilities is to create an organisational infrastructure which responds to national challenges and has the capability to respond to strategy and learn from its past performance. The SPICE FM framework can be viewed as one component of achieving this goal. Application of the SPICE FM process maturity model in NHS facilities A case study was carried out primarily to test the applicability and the use of the above described SPICE FM process capability assessment model, in order to utilise its benefits within NHS facilities. This key objective can be further expressed in terms of the anticipated outcomes for NHS trusts at large. A facilities directorate of a major NHS trust situated within the northwest of England was chosen for this study as it was at that time undergoing a major re-structuring programme to incorporate its private finance initiatives (PFI). The following outcomes for the facilities directorate were envisaged: • • • •

a review of operational processes within the department, highlighting its key strengths and weaknesses; a prioritised list of process-related improvements based on its contribution to the department’s strategic objectives. a greater insight into the value of using the SPICE FM framework in a hospital facilities environment; and an understanding of the appropriateness of different assessment techniques.

The scope of the study was limited to domestics and linen, portering, operational estates and catering within the facilities directorate at the NHS trust where the case study was performed. The decision was taken to limit the assessment for the above-identified departments due to the limitations attached to the study. But, it was envisaged that the second phase of the study would be extended to the rest of the facilities directorate at a later date. Research methodology It was concluded that case study research methodology is the most suitable research strategy in searching SPICE FM applicability within NHS facilities. The case study is a research strategy which focuses on understanding the dynamics present within single settings 97

(Amaratunga and Baldry, 2000) and usually refers to relatively intensive analysis of a single instance of a phenomenon being investigated. The key feature of the case study approach is not method or data but the emphasis on understanding processes as they occur in their context. The investigator interviews individuals or studies life history documents to gain insight into behaviour and attempts to discover unique features and common traits shared by all persons in a given classification. Much case study research, because of the opportunity for open-ended inquiry, is able to draw on inductive methods of research, which aim to build theory and generate hypotheses rather than primarily to test them. In this context, the assessment methodology aimed to assess the capability of the FM processes that support the implementation of the facilities directorate’s business strategy. A series of meetings with senior management at the trust gained the necessary commitment to proceed with the study. A case study plan was prepared based on these meetings. A short presentation to members of the departmental management staff provided background information relating to the SPICE FM framework and outlined objectives for the study. Below is a list of the key assessment activities undertaken: •

•

•

Senior management and departmental management interviews. The objective of the interviews was to understand the management views of the critical issues facing the department; what process capability management the department has; how policies and procedures are defined; how communication flows through the organisation; and the critical process issues facing the department, and how process improvement fits into that vision. There were 11 interviews that were carried out within the directorate. Supervisor and line employee workshops. The two workshops used an interactive polling tool designed to promote discussions relating to FM processes and their understanding of the key strategic issues facing the directorate. A representative cross-section of 12 supervisors and 12 line employees participated in the workshop, ensuring an unbiased view of the organisation. Document review. The research team viewed items of documentation that members of staff have described. This was to establish whether the documents exist, what form the documents take and their availability to staff.

Review of facilities management processes The SPICE FM framework evaluated the FM processes of the facilities directorate identified at level 2 of the SPICE model, against the five process enablers that are pre-conditions for implementing the process. This paper attempts to assess key processes of level 2 of the SPICE model against each of the process enablers when presenting the findings. Consequently, only key findings are evaluated and reported in this paper. In this context, the following sections summarise the findings relating to above FM process capabilities assessment. Service requirements management “Managing customer requirements identifies organisational and end-user needs. Documented service level agreements and performance standards are developed and continuously reviewed to remain consistent with customer requirements. Service delivery staff is familiar with the service level agreements and performance standards”, commented the facilities service development manager on FM service requirement capturing procedures. The need to 98

establish comprehensive service requirements is implicit within the objectives of the patient driven NHS Plan (Department of Health, 2000a). Accordingly, the facilities directorate has a clear commitment to the patient and end user, and this customer focus is present at all staff levels. Each of the directorate’s key services had different systems to capture and maintain customer requirement at an operational level. The operational estate service had a wellestablished system for identifying and recording maintenance requirements. All levels of staff were familiar with and understand these systems and there were clearly defined responsibilities for updating and accessing the system. An experienced and stable workforce operated the help-desk, and consequently, the quality of information recorded was of a high standard. Supervisors offered an important supporting role to the help desk staff, and ensured additional technical experience was available when required. With reference to domestic services, statutory controls, patient environment assessment (NHS Executive, 2000) results and continuous review with hospital staff formed the basis for domestic specifications of individual areas. Service level agreements were in place for all areas of the hospital, specifying the quality and frequency of service. Specification sheets for each area communicated the service level agreement’s requirements to staff. Portering had a clearly defined target to respond to all calls within 15 minutes. Duty rooms were at the heart of the portering service, recording and communicating requirements via a telephone desk and radio system. A log recorded each request’s start time, location and completion time. The catering service has undergone considerable change in recent months, following the NHS Plan (Department of Health, 2000a). The patient charter established clear guidelines for menus and choice. These broad requirements were further defined in standards for food hygiene, patient feeding, nutritional requirements and purchase specifications. Discussion The facilities directorate had well-established systems in place to capture and maintain customer requirements. The provision of adequate training and resourcing ensured that there was adequate capability to satisfy the requirements of this key process. It can therefore be concluded that the facilities directorate satisfied all process enablers against which its service requirement management was assessed. Service planning Service planning established realistic schedules of work based upon customer service level agreements and performance standards. Estimates (e.g. resources, maintenance schedules, budgets, purchasing) were prepared for all work to be performed (e.g. scheduled and reactive maintenance). Accordingly, the department had a clearly defined categorisation and prioritisation system in place for its maintenance work. Maintenance work had been categorised as planned (statutory, essential and desirable) and defect (urgent and non-urgent) maintenance. Target times for typical maintenance activities provided a baseline for performance monitoring. However, this information was not fully utilised in redefining current activities. Supervisors were responsible for issuing dockets to trade staff, and used the categorisation system outlined above to prioritise work. Within the domestics department, there was recognition that a “clean environment” for patients was the main objective. Consequently, theatres, corridors, toilets, entrance and waiting areas were all deemed priority areas (NHS Executive, 2000). Based on these priorities, there were clear responsibilities for drafting work schedules, which take into account frequency levels based on agreed performance standards. 99

Discussion Individual departments had well-established systems in place to plan service delivery based on service level requirements. The provision of adequate training and resourcing to fulfil this role ensured that there was adequate capability to satisfy the requirements of this key process. Service performance monitoring Service performance monitoring ensured that services were delivered in a manner that was consistent with service level agreements and performance standards established with the customer. Feedback was gathered (e.g. from customers, staff) to monitor customer satisfaction levels. Performance measures (e.g. waiting times, error rates, processing times) were reviewed on a regular basis with staff and corrective action was taken when service delivery deviated significantly from service plans. The patient environment assessment (PEAT) (NHS Executive, 2000) initiative played a major role in monitoring the service performance within the directorate. This involved unannounced visits to check and assess the standard of the hospital environment, scoring within a traffic light matrix. Senior management demonstrated a clear commitment to action the issues raised by the assessment process, and this commitment was also present at individual departmental levels. Furthermore, staff were encouraged to see a major national initiative focus on issues in which the facilities directorate had a critical role to play. Although the assessments provided an important external verification of the hospital’s performance, the study revealed that the assessment criteria were still not fully integrated within current management systems. This resulted in short-term measures and “fire-fighting” to meet the immediate requirements of the next assessment. Consequently, staff were becoming more cynical in relation to the assessment’s long-term value. Although the directorate had a range of customer satisfaction questionnaires in use throughout the departments, the departments applied them inconsistently. Low response rates also undermined current questionnaire effectiveness. Domestic staff monitored performance and ensured that service level agreements were satisfied, using weekly and monthly checklists. A complaints system was also in place that provided hospital staff with a mechanism for reporting faults. Staff reviewed linen stock levels on an annual basis. Loss rates benchmarked the department’s performance against other hospitals. The log systems employed by the portering department captured important performance data. However, an individual porter’s performance was not monitored due to resource constraints. The task of analysing the data was very labour intensive without a computer-based information system. The portering role was recognised as a vital one, with a significant supporting role to clinical staff and other facilities services. Improved monitoring of performance may yield efficiency gains, thus helping to minimise the effect of current staff shortages. The NHS Plan (Department of Health, 2000a) recognises food provision as an important determining factor in patients’ satisfaction levels. Accordingly, the catering service had a comprehensive range of tools with which to monitor performance. Quality standards formed a baseline which catering used to monitor the performance of the external food supplier. Regular food samples ensured minimum requirements were satisfied, including issues such as hygiene and infection control. A form issued to wards directly monitored food wastage. Patients had a well-established procedure in place to process any complaints. Nurses and patient representatives were the initial contact point, which typically resulted in a visit by the catering manager to assess the nature of the problem and offer a solution if possible. A formal response system was in place to handle complaints that were more serious. 100

Discussion

Although all departments had monitoring systems in place, there was inconsistency and a lack of integration between systems. Resource levels also inhibited the capability of some departments to effectively monitor their performance. It was recommended through the SPICE FM assessment that PEAT criteria needed to be included within current performance monitoring systems. This may include the introduction of the “mystery shopper” and standard customer satisfaction surveys. A facilities questionnaire that includes all the department’s key measures can be developed, which directly links to the strategic objectives of the directorate. A well-planned and co-ordinated questionnaire system should yield higher response rates than previously attained. Improvement in the monitoring systems of the directorate is vital to review performance against the NHS Plan’s objectives. Furthermore, a well-established and effective monitoring system will provide management with an effective tool to supervise the transition of services to newly introduced private finance initiatives. Supplier and contractor management The key process area “supplier and contractor management” is not included within these findings due to a lack of adequate information being gathered during the assessment process. Health and safety processes Senior management’s commitment to establishing safe systems of work was recognised at all levels of the directorate’s staff. Consequently, the health and safety of all the hospital’s employees and patients was viewed as a priority. Statutory guidance provided the basis for much of the directorate’s health and safety policies. Each department provided a variety of job specific and generic health and safety training for its staff. However, the quality of records kept by departments varied greatly. Risk assessment requirements were clearly identified for tasks, either job specific or generic. It was recognised that skilled trade staff typically assess and mitigate risks intrinsically; it was also apparent that in some instances the required paperwork was not in place. This was mainly a resourcing issue, but placed the trust, as a whole, at significant risk. It should also be noted that auditing systems available at the time of the study were not highlighting this problem. Operational estates employed highly skilled trade staff that had the benefit of considerable experience and job specific health and safety training. Training for domestic staff was generally poor, typified by the limited number of appraisals performed within the department. A high turnover of staff compounded the problem. Time resourcing was the major constraint, due to the resource consuming nature of training individual staff. The language barrier exacerbated the problem, which further increased the time required to train. Of greatest concern was inadequate health and safety training, which may put both staff and patients at risk. The assessment procedure identified, however, the department’s efforts in translating complex legislative issues into a format that staff can understand. Although portering staff attended many health and safety courses, administrative support was poor. Consequently, the department accepted that not all employees might receive the necessary mandatory training.

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Discussion There was a clear commitment within the department to manage risk effectively, and extensive training and systems support this. However, resource limitations and a lack of adequate verification and auditing were undermining these efforts in certain aspects of service delivery. Introduction of a comprehensive induction programme for new domestic staff, with an appropriate increase in resources to deliver the training, was also identified as a pre-requisite to educating the staff on health and safety issues within the directorate. Risk management Risk management involved identifying and evaluating risks so that action was taken to reduce the risk of an event occurring or to constrain the consequential effects should that event occur. Risks were identified in all areas of the business (e.g. to the environment, health and safety, supply breakdown, property, financial performance). All staff were actively involved in identifying risks and taking steps to prevent risks becoming a reality. The recently implemented Controls Assurance Standards (Department of Health, 2000b) played a vital role in the management of the trust’s risk. Awareness of controls assurance amongst staff varied greatly within the facilities directorate. Departmental management interviews revealed a clear understanding of the standard’s objectives and requirements. However, supervisors and trade staff were largely unaware of its existence. It was apparent that there had been insufficient risk management training at this level. This was significant, as good risk management awareness and practice was important at all levels, a point re-affirmed in the Controls Assurance Standard. Whilst it was clear that this level of staff manage risks continuously – sometimes consciously and sometimes without realising it, the Controls Assurance Standard was designed to ensure that risks are managed systematically and consistently. Discussion Implementation of risk management (controls assurance) awareness training for staff at all levels was identified through the assessment, and the training required tailoring to meet individual employee’s requirements. Re-affirming the importance of risk assessments during controls assurance awareness training, and increasing auditing of health and safety risk assessments were some other recommendations. Despite the problems highlighted above, systems were in place to aid the development of departmental risk registers and assist managers in meeting the requirements of the Controls Assurance Standard. In addition, “internal audit” provided a system of verification to confirm compliance. Another recommendation identified through the assessment was to introduce a comprehensive induction programme for new domestic staff, with an appropriate increase in resources to deliver the training. Service co-ordination Service co-ordination drew on the experience of other service teams, suppliers and customers to effectively meet customer requirements. Co-ordination between service teams, suppliers and customers ensured disruption to the core business was minimised. Representatives for co102

ordination were appointed and methods for co-ordination agreed. The breaking down of barriers between staff groups by ending rigid demarcation was a key objective of the NHS Plan (Department of Health, 2000a). The co-ordination of facilities and trust services was critical to patients receiving seamless and effective service delivery. Following the amalgamation of hotel and estates services, co-ordination was recognised to have improved significantly within the directorate. Informal mechanisms, including face-to-face communication and meetings, formed the basis of co-ordination within the directorate and trust. It was, however, apparent that in some cases a department was unaware of the impact of their performance on other services. This problem was partly the result of unclear or unenforceable performance standards between different service groups. The directorate also had no clear dispute resolution method with which to tackle co-ordination problems in a structured and fair manner. Consequently, resolution was sporadic and slow (examples raised in the assessment include the unnecessary storage of linen on wards and inadequate collection of dirty linen from wards). This problem extended to the trust as a whole, in particular the coordination between facilities and clinical services. It was apparent that when co-ordination problems did occur, they were often not resolved quickly. It was important that the impact of co-ordination problems was apparent to both parties and that they are both committed to finding a resolution. Discussion Where major co-ordination was required between services (clinical and non-clinical), clear performance standards should be established and monitored. This emphasised the importance of having effective service partnerships within different departments of the trust as a whole. It was recommended that the directorate needed to establish procedures for dealing with coordination/dispute resolution system. This will help to resolve issues quickly and break down barriers between staff, a key objective of the NHS Plan. The directorate relied heavily on informal co-ordination mechanisms. Although this resolved most issues, a more structured approach was required to support co-ordination between critical services. Summary of findings – raising the profile of facilities management processes through its capability assessment In order to respond to changing business practices within NHS, the range and scope of facility activities necessarily extends beyond merely providing technical solutions to problems arising to ensuring that facilities effectiveness is maximised and occupancy costs minimised. To this effect, the SPICE FM process evaluation tool provides a step-wise approach to continuous process improvement that helps NHS facilities managers to evaluate and continuously improve their service delivery processes at an operational level. It was recognised at all levels of the directorate that resources were stretched. This was leading to a fire-fighting approach, rather than pro-actively looking for and implementing improvement opportunities. Improvement required short-term investment in resources to realise long-term gains. Although a number of communication forums existed that provided opportunity to identify improvements (team briefs, appraisals), evaluation of processes typically only occurred when driven and encouraged by senior management. This required appropriate methods to be established that facilitated evaluation at a departmental and directorate level. SPICE FM assessment demonstrated the capabilities of key FM processes within the trust against the enablers and a summary of findings is presented above. SPICE was identified as a benefit to FM as a means of process improvement: 103

• • • • •

•

it is an assessment mechanism based on facts and not perceptions; SPICE creates a strong process focus within FM; it is a means to achieve consistency and consensus on the way forward; the framework identifies process strengths as well as weaknesses; the assessment time is relatively short whilst only requiring the participation of the whole team for a briefing at the start of the assessment, and a workshop to discuss the findings and determine improvement priorities; it creates a platform for discussing improvements and prioritising implementation plans.

SPICE assessment has helped the facilities directorate in identifying the specific FM process capabilities within the directorate, thereby to recommend future action to the operational managers and employees, who can, through their day-to-day actions, make it happen. Further, the directorate felt that the outcome of the SPICE FM assessment could be used to achieve better performance against other national scale systems that are in place within the NHS, for e.g. controls assurance (Department of Health, 2000b), PEAT (NHS Executive, 2000), NHS Performance Measurement Framework (Department of Health, 2002b), NHS Plan (Department of Health, 2000a), Appointing a dedicated resource to champion process improvement was one of the key recommendations of the study. This resource will be responsible for implementing the types of issues raised in this paper, as well as establishing a process evaluation infrastructure to involve employees at all levels of the directorate and trust in the identification and implementation of improvement opportunities. Where major co-ordination was required between services (clinical and non-clinical), clear performance standards should be established and monitored. Limitations of SPICE capability maturity model The successful implementation of the SPICE assessment within NHS facilities has identified that it could also be a medium to communicate and align new strategic approaches. It has been successful because it is able to identify an organisation’s strengths and weaknesses as well as improvement opportunities. This holistic approach should result in better performance, resulting from more informed management decision making. However, it is important to acknowledge, as with any other assessment mechanism, SPICE also has its drawbacks. The SPICE model does not specifically deal with formulating and evaluating FM strategies. (The research team took steps to eliminate this by linking strategy communication tools with the SPICE FM process maturity model (Amaratunga et al., 2000).) The danger in this limited involvement in the strategic process of the SPICE model is that it could be seen as simply an operational tool rather than being linked with FM strategies. Further, the SPICE model is seen as an audit tool of what is already happening, and it does not indicate best or preferred FM practice in an organisational context. Conclusion The FM process assessment methodology described in this paper tries to analyse the status of the current FM processes within FM organisations. The study reported in the paper specifically covers its applications within a NHS facilities directorate. The concept of assessing FM process improvements within NHS facilities develops participation, awareness, 104

a decentralised decision-making process, and responsibility for achieving formulated goals. Consequently, there must be a goal-achievement analysis, in which the organisation draws conclusions about what it is doing well, what it is not doing so well, and what can be improved. Although each stage of the SPICE FM process maturity model suggests a number of processes that should be performed, FM providers still have the flexibility to add or ignore any processes that, according to their business objectives, do not add value. A continuous alignment between process goals and business goals is a necessity to justify process improvement and the investment it requires. In this way, the use of the SPICE FM framework facilitates learning. The learning process places special emphasis on how organisational FM strategy has been communicated throughout the FM directorate and how different measures are inter-related. At both individual and organisational levels, a better understanding of the relationship between what is being done and how well the organisation succeeds will be developed. Of course it is crucial how the SPICE framework could actually be used. What is needed is an appropriate incentive structure and practical arrangements for handling the information generated, so that it becomes attractive and feasible to develop a set of good practices. References Amaratunga, D., Baldry, D. (2000), "Theory building in facilities management research: case study methodology", The University of Salford, pp.107-23. Amaratunga, D., Sarshar, M., Baldry, D. (2000), "Process improvement in facilities management: the SPICE FM approach", Proceedings of the Conference on Providing Facilities Solutions to Business Challenges – Moving Towards Integrated Resource Management, CIB Working Commission W70 – Brisbane 2000, Queensland University of Technology, Brisbane, pp.161-70. Construct IT (2001), Introduction to SPICE FM, The University of Salford, Salford, . Department of Health (2000a), NHS Plan, HMSO, London, . Department of Health (2000b), Controls Assurance: Guidelines for Implementing Controls Assurance in the NHS, HMSO, London, . Department of Health (2002a), Shifting the Balance of Power – Creating Strategic Health Authorities, . Department of Health (2002b), NHS Performance Assessment Framework, . Hinks, J., McNay, P. (1999), "The creation of a management-by-variance tool for facilities management performance assessment", Facilities, Vol. 17 No.1/2, pp.31-53. NHS Estates (2002a), The Patient Experience, . NHS Estates (2002b), Sustainable Development in the NHS: Introduction, . NHS Executive (2000), Patient Environment Action Teams (PEAT), . 105

Ould (1995), Business Processes: Modelling and Analysis for Re-engineering and Improvement, Wiley, New York, NY, . Paulk, M., Weber, C., Curtis, B., Chrissis, M. (1994), The Capability Maturity Model: Guidelines for Improving the Software Process, Addison-Wesley, Reading, MA, . Sarshar, M., Haigh, R., Finnemore, M., Aouad, G., Barrett, D., Baldry, D., Sexton, M. (2000), "SPICE: a business process diagnostics tool for construction projects", Journal of Construction Procurement, pp.241-50. Then, D.S.S. (1996), "A study of organisational response to the management of operational property assets and facilities support services as a business resource – real estate asset management", .

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Facilities Management Processes in Higher Education Institutions Md Yusof Hamid David Baldry Keith Alexander University of Salford, UK

Abstract The study presented in this paper is intended to understanding the facilities management processes in higher education institutions focusing on Estate/ FM Division in supporting the aim and objectives of the organisation. The strategic FM processes is used to understand the organisation. These processes are driven by changes in the business strategy and have to fulfil the predicted demands in future. This paper describes a preliminary exploratory pilot study that examines the adoption of strategic FM processes within university organisation. The author involvement in discussion with CEN WG5 UK Mirror Group in developing strategic FM processes will be also taken into consideration. This paper do not dealt in deeper with the methodological issues of FM processes. The strategic FM processes is useful in understanding the organisation in accomplishing their aim and objectives. The current changing paradigms, trends, and economic conditions in higher education institutions required a serious thinking on how to manage and maintain university facilities. Using a single case study in this pilot study required the need to validate the finding through deeper the case or broader the case. The study reveals an understanding of the adoption of strategic facilities management processes within higher education institutions is importance in assist the management decision making. Keywords – General review, facilities management processes, higher education, strategic facilities management Introduction Optimisation of facility management requires a broad and clear understanding of the interdependencies of the organisation’s processes and facility management processes (BSI, 2007). The facility management model provides a framework describing how facility management supports the primary activities of an organisation. It deals with the demand and supply relationship and presents the different levels of possible facility management interaction. An organisation should rely on its primary processes in order to achieve its strategic objectives. For higher education institutions, changing market forces, requirement from new legislation, technology demand and economic conditions constantly influence these processes. These changes shall be managed and structured in strategic, tactical and operational levels, in order to remain viable and compliant to changing demands. At the broadest level, education quality can be viewed as set of elements that constitute the input, process and output of the education systems and provides services that completely satisfy both internal and external strategic constituencies by meeting their explicit and implicit 107

expectations (Cheng and Tam 1997). If higher education is viewed as a system, then any quality management program must therefore assess inputs, process and outputs (Becket and Brookes 2005). Facilities management processes are those extending over different functions and having customers as well as suppliers, therefore FM organisational perspective should focus on the core and critical FM processes (Amaratunga, Sarshar et al. 2002). Since FM is a co-ordinating process-based function, a high level of management process capability is central improving FM and business capability (Aouad, Cooper et al. 1998). FM processes are initiated by the demand of primary processes like usable space, functional equipment, relevant services on a specified services level etc. In the hierarchy, FM functions and their processes are generally considered to have two fundamental aspects which were general management planning including control function and a specific or identifiable FM function (Yu, Froese et al. 2000). Difference benefits from the use of process models can be described and classified under three generic themes such as the client i.e. potential improvement of the product, the process (focusing on its characteristics and on the way it is developed) and benefits for the organization as a whole (Tzortzopoulo 2004). The aim of this paper is to contribute in the area of strategic FM processes in higher education institutions by presenting a conceptually organised literature synthesis in the area. The contribution of such synthesis is to clearly present gaps on understanding of implementation of CEN/TC 348 Part X (Guidance on the development and improvement of processes). This paper is divided into three main sections. First, a literature review of process mapping and FM processes. Second, the proposed generic FM processes CEN/TC 348 Part X (Guidance on the development and improvement of processes). Third, the adoption of the generic FM processes to the exploratory pilot study on higher education institution sector focusing at Estate Division, University of Salford as a case study. General Literature on Process ISO 9001 requires a business entity to follow a process approach when managing its business. ISO 9000 and the Capability Maturity Model (CMM), also called model based process management standards are the most well-known examples of process management standards (Ahern, Clouse et al. 2004). They indicate how well processes are managed and measured and whether they are on course for continuous improvement (Davenport 2005). With Capability Maturity Model Integrated (CMMI), stepwise process improvements can be achieved by either moving up a maturity level of an individual process area or an integrated set of process areas. There are also a developed maturity models for the construction industry (Sarshar, Haigh et al. 2000). While a variety of definitions of the term processes have been suggested in management literature, this paper will use the definition first suggested by ISO9001: 2000 which define process as a set of interrelated or interacting activities which transforms inputs to outputs. These activities require allocation of resources such as people and materials. Anjard (1998) describes a process as a series of activities (tasks, steps, events, operations) that takes an output, adds value to it, and produces an output (product, service, or information) for a customer. A process map can act as visual aid for picturing work processes which shows how inputs, outputs and task are linked. Cousins (2003) describe a process map as a picture showing how the transformation is carried out. It shows the inputs and outputs, (best described using nouns) the activities in between (best described using verbs) and for each of 108

the activities, the inputs and outputs used and produced. Process maps are a hierarchical set of diagrams that depict a process in ever greater detail as they descend through its levels (Pojasek 2003). Two broad types of process maps can be found in the literature, i.e. true maps of what happen (as-is models) and protocols of what ought to happen (‘to-be models) (Winch and Carr 2001). Okrent and Vokurka (2004) add the third phases in process mapping and consequently business process re-engineering: creating the “As-Is” model, creating the “To-Be” model and “Bridging the Chasm,” or in other words, getting from the here and now to the future state. The process map enables us to obtain comprehensive macro and micro-views of operations. Figure 1 shows the level of process map from macro level to micro level. Figure 1: Level of process map/ hierarchy of process levels Top

Bottom

Macro Level

Scope of system 5 – 20 processes shown

Mini level Of Processes

Assimilate complexity of details to comprehensive level 5 – 15 mini processes shown

Micro / Specific Level

Input

Output

Process

Sub Process

Activity

Sub Process

Activity

Activity

Detail of system Depend the purpose of mapping Tasks

Tasks

Tasks

Tasks

Process maps can present different levels of detail on the process being modelled. This increased visibility improves communication and understanding, as well as providing a common frame of reference for those involved with the work process (Pojasek 2005). The generic high level (phase or high level) provide an overview of the whole process, describing the main stages and/or activities (Chapman and Austin 2002). This model focuses upon flows of information within an organisation and between different actors in a broad perspective. The generic development process proposed by Ulrich and Eppinger consists of two dimensional maps, describing a dimension of sequence, of stages in one axis, and actors or functions responsible for each sub-process on the other axis (Ulrich and Eppinger 2000). The sub-processes representing specific activities or tasks are usually described through different levels of detail. The detailed level can be developed using structured approaches to modelling IDEF0 – integration definition language 0 for functional model. It derived from information technology system engineering which focuses on information flows. The IDEF methodologies were devised in the 1970s for use in the US aerospace industry. By the mid1970s they were in use in Europe and are now notable among modelling techniques for their wide range of usage, particularly IDEF0. It tend to fail in providing a broad view of the process due to excessive levels of detail (Chapman and Austin 2002). Such system-orientated approaches do not allow value adding and non value adding activities to be distinguished (Kartam, Ballard et al. 1997). The business approach focuses on actual flows of information within an organisation between the different actors involved. This approach typically have a 109

two-dimensional map compared to one dimensional context-free maps preferred in the engineering approach (Winch and Carr 2001). The developers of the process protocol (Aouad, Cooper et al. 1998) found that their industrial collaborators preferred to focus on the overall principles of the process, rather than the details at the level of the IDEF description. The Generic Design and Construction Process Protocol (GDCPP) was created by the University of Salford in 1998. It is a high-level process map that aims to provide a framework to help companies achieve an improved design and construction process. Process Protocol Level 2 being developed later with the primary deliverables is to create sub process maps of the eight Activity Zones that exist within the original Generic Design and Construction Process Protocol model. The top-level view is useful in scoping process improvement projects and establishing boundaries. (Anjard 1998) suggested that all process maps should be developed from the top-down approach. A process map presents a process in a top-to bottom structure or hierarchy (Pojasek 2005). From the quality management system (QMS) perspectives processes have to be capable of achieving top down driven organisational objectives. By starting at the bottom organisation only replicating what they already have and not seriously challenging the appropriateness of the processes in the context of meeting business goals (Batalas 2006). The process approach is to engage top management and to demonstrate that an effective quality management system is capable of delivering continual improvement of business performance. Activities are parts of the business process that do not include any decision making and thus are not worth decomposing (although decomposition would be possible), such as answer the phone, produce an invoice and other activities. The Architecture of Integrated Information System (ARIS) model is a framework of methods for modelling enterprises, which was developed at the Institute for Business Related Computer Science of the University of Saarland. The basic idea behind ARIS is to break down the company to be represented into different views for the purpose of reducing complexity. It consists of the following elements of organisational view, functional view, data view, process view and service-related view. The methodology can be used to model the As-Is status of the processes and the Should-Be status. As one of the Enterprise Modeling methods, “Architecture of Integrated Information Systems” (ARIS) provides four different aspects of applications (Scheer 1998). ARIS varies three main perspectives of techniques such as modeling language known as Event-driven Process Chains (EPC). The EPC method was developed within the framework of ARIS by Prof. Wilhelm-August Scheer. Second, on conceptual description ARIS can model and structure Business Process Models. Furthermore, ARIS House has been developed to implement business models in information system. Based on CEN WG5 UK Mirror group discussion, the proposed FM processes will be start at the generic high level (top down) or at the macro level of the processes. MS Visio 2000 has been selected by the group to map the proposed FM processes Facilities management processes The established definition presents the FM as ‘the integration of processes within an organisation to maintain and develop the agreed services which support and improve the effectiveness of its primary activities’ (BSI 2007). Several facilities management definition have produced word ‘process’ in the definition (BSI 2007); (BIFM 2007); (Alexander 1996; Aouad, Cooper et al. 1998). Figure 2 shows the facility management model with the relation of its primary processes and support processes. 110

PRIMARY PROCESSES Client O R G A N I S A T I O N

SUPPORT PROCESSES STRATEGIC

Customer

D E M A N D

S P E C I F Y I N G

S L A S

TACTICAL

K P I S

D E L I V E R I N G

S U P P L Y

Internal and / or External

P R O V I D E R

OPERATIONAL End user PRIMARY ACTIVITIES

FACILITY SERVICES

Facility Management Agreement Figure 2: Facility Management Model (BSI 2007) FM processes can be of different kinds and correspond to the various ways in which a process can be modeled. First, a strategic FM processes which investigate alternative ways of doing a thing and eventually produce a plan for doing it. These processes are often creative and require human co-operation; thus, alternative generation and selection from an alternative are very critical activities. At a strategic FM processes in achieving the objectives of organisation in the long term, the organisation should identify the process such as alignment process, FM strategy process, input to decision making process, risk analysis process, quality process, PDCA process (plan, do, check, act ), external relation process and controlling process. These FM processes are driven by changes in the business strategy and have to fulfil the predicted demands in the future. Second, a tactical FM processes which help in the achievement of a plan and are more concerned with the tactics to be adopted for actual plan achievement. At this level, to implement the strategic objectives in the organisation in the medium term through monitoring process, business planning process, specification process, quality assurance process, auditing process, controlling process, leadership process, continuous improvement process, change management process and communication process. Third, an implementation or operational FM processes which are the lowest level processes and directly concerned with the details of the and how of plan implementation. At this level, to create the required environment to the end users on a day to day basis through delivery activities, process evaluation activities, surveillance activities, service request activities, information collection activities, reporting activity and communication activity Adoption of CEN/TC 348 FM Processes Model 111

The generic facilities management processes has been developed by CEN WG5 considering the FM definition in BS EN 15221-1:2006:5. The adoption of the generic FM processes model into different countries, individual organisations and projects can be approached as embedding new working practices. This thinking informed the design of the theoretical framework as shown in Figure 3.

Process model design & Implementation strategy Generic CEN/TC 348 FM Process Model Factors affecting implementation

HEIs FM Process Model Adapting the model to context

Individual University FM Process Model Adopting the process model

Analyse performance outcomes

Figure 3: Generic CEN/TC 348 process models implementation framework This framework aims at providing a generic description of generic FM processes models implementation within the sectors and individual organisations under the sectors. Examining the implementation of generic CEN/TC 348 FM processes models within sectors and individual organisations is one way to better understand how these models can improve the FM organisation in supporting the primary activities of the organisation. A research questions can be proposed as: • How do higher education institutions and individual organisations implement this generic CEN FM processes model? • What are the factors affecting the implementation of Generic CEN FM processes models within the higher education institutions? • What are the benefits of implementing FM processes within a higher education institution? • How do strategic FM processes contribute in supporting university aim and objectives at a strategic level? Exploratory Pilot Study The answer to the above questions can be sought through a case study approach. The case study provides a basis upon which theoretical propositions are formulated and generalised (Yin, 2003). Considering Yin (2003), applying the exploratory phase of investigation is considered appropriate in this research. By choosing single case study it will allow the 112

researcher involved in-depth analysis of the case studies (Creswell 1998; Robson 2002). For the purpose of this paper the proposed generic CEN/TC 348 processes model has been adopted within the University Of Salford organisation. The adoption of strategic FM processes in term of understanding the organisation processes has been chosen. Figure 4 shows the adopting of Generic FM processes model into the university organisation. Figure 4: Understanding University Organisation Review University Of Salford Organisation, Its Primary Processes, Activities, Support Processes, External Factors and Internal Capabilities

Identify University of Salford Primary Processes

Identify University of Salford Primary Activities

Identify University of Salford Support Processes

Identify University of Salford External Factors

Identify University of Salford Internal Capabilities

The main processes in this generic FM processes is to review organisation its primary processes, activities, support processes, external factors and internal capabilities. Table 1 shows the university review on understanding its organisation. Table 1: Review University of Salford Organisation University primary processes Primary Activities Support processes

External factors Internal capabilities

Education for capability, Research for the real world and partnership with Business & Community Learning and Teaching , Research, Social services activities of universities Student recruitment, administration and pastoral care, personnel, finance, property management, estate infrastructure, IT and communication services, public affairs/ research and development/ liaison and other support services, campus support services, health and safety & other trading activities Dramatic change, Knowledge economy, Market forces, Government policy, International climate, Internal process re-engineering Quality assurance To act appropriately in the context of social and cultural diversity and the modern day environment To make ethical evaluations To think critically and produced solutions To manage themselves and related to others To communicate effectively in context To seek, handle and interpret information Entrepreneurial orientation Technological capabilities Financial resources invested.

In understanding the organisation according to the suggested strategic FM processes model it list eight aspects to be considered as follow: 113

1. 2. 3. 4. 5. 6. 7. 8.

Identify and review business organisational strategy Establish and consider stakeholder management framework Identify and review business organisational management Identify business organisational deliverables Identify organisation business critical issues Identify and review organisation business model Identify drivers of primary business activities Identify support requirement of primary business activities

For the purpose of this paper a strategic FM processes being mapped within the university organisation using university document on university websites. The example of strategic FM processes being mapped within University of Salford is attached as Appendix 1. Conclusion The process should be aligned with the organisation’s strategic goals. It is very importance for FM processes to demonstrate a business case that proves the processes has positively impacted the strategy. The study concluded that there is a need for further research on the adoption of facilities management processes in higher education and suggest a different way to demonstrate the strategic facilities management in managing university estate. An understanding of strategic FM processes is importance for the organisation. The choices a facilities professional makes today often affects a higher education institution for years and decades to come. And that in turn affects the capacity of higher education to successfully fulfil its mission of education and research. This paper has been reviewed the importance of strategic facilities management processes in higher education context in facing change and challenge of modern university in this millennium. This required a depth understanding of the relationship between facilities management processes and the core business of the university to provide university as a sustainable place. References Ahern, D. M., A. Clouse, et al. (2004). CMMI distilled. A practical introduction to integrated process improvement. Boston, MA., Addison-Wesley. Alexander, K. (1996). Facilities Management – Theory and Practice, . London, E&FN Spon. Amaratunga, D., M. Sarshar, et al. (2002). "Process improvement in facilities management: the SPICE approach." Business Process Management Journal, 8(4): 318-337. Anjard, R. (1998). "Process mapping: a valuable tool for construction management and other professionals." Facilities 16(3/4): 79-81. Aouad, G., R. Cooper, et al. (1998). Generic Design and Construction Protocol: Final Report. Salford, University of Salford. Batalas (2006). A practical guide to designing the process approach, Saferpak Ltd. Becket, N. and M. Brookes (2005). "Analysing Quality Audits in Higher Education." Brookes eJournal of Learning and Teaching 1(2): 1-22. BIFM. (2007). "British International Facilities Management." Retrieved 2 February, 2007, from http://www.bifm.org.uk. BSI (2007). Facility Management, British Standard Institution. BS EN 15221-1:2006: 5. Chapman, D. W. and A. E. Austin, Eds. (2002). Higher Education In The Developing World Changing Contexts and Institutional Responses. Wesport, Conn., Greenwood Publishing Group. 114

Cheng, Y. C. and W. M. Tam (1997). "Multi-models of Quality in Education." Quality Assurance in Education, 5(1): 22-31. Cousins, M. (2003). "Follow the Map." Six Sigma Today Launch Issue (October 2003). Creswell, J. W. (1998). Qualitative Inquiry and Research Design: Chosing Among Five Traditions. London Thousand Oaks, California, Sage Publication Ltd. Davenport, T. H. (2005). "The coming commoditization of processes" Harvard Business Review, June, 2005: 101-108. Kartam, S., G. Ballard, et al. (1997). "Introducing a new concept and approach to modelling construction." Journal of Construction and Engineering Management 123: 89-97. Okrent, M. D. and R. J. Vokurka (2004). "Process mapping in successful ERP implementations." Industrial Management & Data Systems 104(8): 637-643. Pojasek, R. B. (2003). "Selecting Your Own Approach to P2." Environment Quality Management, Summer(2003): 85-94. Pojasek, R. B. (2005). "Understanding processes with hierarchical process mapping." Environment Quality Management, 15(2): 79-86. Robson, C. (2002). Real world research. USA, Blackwell. Sarshar, M, et al. (2000). "SPICE: A business process diagnostics tool for construction projects." Engineering, Construction and Architectural Management 7(3): 241-250. Scheer, A. W. (1998). Business Process Engineering: Reference Models for Industrial Enterprise, Second Edition. Secaucus, NJ., Springer-Verlag New York Inc. Tzortzopoulo, P. (2004). The Design And Implementation Of Product Development Process Models In Construction Companies. Research Institute for the Built and Human Environment. Salford, UK, University of Salford. Degree of Doctor of Philosophy. Ulrich, K. T. and S. D. Eppinger (2000). Product design and development: second edition. USA, McGraw-Hill. Winch, G. M. and B. Carr (2001). "Processes, maps and protocols: understanding the shape of construction process." Construction Management and Economics 19: 519-531. Yin, R. K. (2003). Case study research: Design and methods. Third Edition, Sage Publication Inc. Yu, K., T. Froese, et al. (2000). "A development framework for data models for computerintegrated facilities management." Automation in Construction, 9: 145-167.

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Appendix 1 : Example of Strategic FM Processes Mapped Within University of Salford

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